Daily Markets Briefing: STI up 0.6%

But expect a pullback today.

According to OCBC, the more muted gains on Wall Street overnight suggests the tone is turning more cautious ahead of the 2-day FOMC meeting, which could spill over to the local bourse as well; the Nikkei is down 0.2% in early trade.

Here's more from OCBC:

While the STI added another 0.6% yesterday, we note that it ended off early high and we also saw a sizable drop in overall market volume.

More importantly, the index did not quite manage to sustain above the immediate 2850 resistance; and by doing so, it has also formed a potential reversal signal.

Continued failure to do could bring about a possible correction soon, which is likely to send the index back towards 2800; we note that there is a parabolic sell signal around 2773, where a trigger could spell more downside risk for the market.