The bearish divergence between the FTSE 100 and the BTI (sentiment indicator) remains in place. When the FTSE rallies on declining BTI odds are that the rally is counter trend. But the decline must resume soon otherwise bullish sentiment will rise and the rally will extend. The stock market is a barometer of social mood, the more it rises the more bullish investors become.
US consumer confidence lifted the mood yesterday after hitting its highest level since 2007. Earnings reports also eased concerns about the economy. For some reason during the earnings season the stock market tends to rise. There is no explanation, but I suspect that CEO/analysts manipulate the market by being too pessimistic about earnings prior to reporting. That is an easy way to boost the share price of your company if you are a CEO.
Meanwhile the market may be volatile today ahead of the FOMC meeting announcement at 6pm. The FTSE continues to lag the S&P 500, this has been a regular feature in the last twelve months. This behaviour is a warning that the bull market is either over or it will end soon. I am not certain because the S&P could rally to new highs but I don't think the FTSE will rally to new highs. So the FTSE is already in a bear market but the S&P could still be in a bull market. As the FTSE is the leading index, this is telling us that the S&P will turn down and start a bear market.