Looking into the next few weeks, the markets are unlikely to have any major bad news. The RBI is likely to oblige with a rate cut on January 29, fuelling sentiments further. Corporate India has reported fantastic numbers and the Reliance results which came out late on Friday, are likely to push indices higher on Monday, given that the results were fantastic. In fact ITC, HDFC Bank, TCS, Wipro, Infosys and Reliance have all reported fantastic numbers for Q3 2013.

If a few other heavyweights like ICICI Bank and L&T report good Q3 numbers, expect the markets to scale historic highs, even before the Union Budget. If the reforms process continues, like it did last week when partial de-regulation of diesel was announced, there's no telling where the market could be headed.

Of course, there are always these negative developments that could de-rail the rally. First, the US is likely to reach a debt ceiling somewhere in mid-February to early the first week of March. Now, if the US Congress fails to increase the debt limit, expect markets to drop sharply. But, in the past we have so often seen drama in the US, like the fiscal cliff which was finally resolved - expect more drama, before things are resolved.

Then of course, there is this fear that the RBI may not cut rate on January 29, which could be a possibility, given that RBI governor Subbarao has the ability to surprise. Who knows, he may even surprise by cutting rates by 50 basis points.

Clearly, in the next few weeks markets are looking to scale historic highs, which is quite possible, at least before the budget. The market trend thereafter would largely depend on the budget itself and what it delivers. Markets are expecting a populist budget given that this would be the last full budget of UPA II, given elections next year. This is unlikely to go down well with the markets.

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