The rally in the FTSE 100 extended to 7347 yesterday, the index was strong probably because the S&P 500 was at new all-time high. The FTSE of course is well below its all-time high, it is lagging the S&P. I always say the FTSE is real stock market, it is the leading index and based on the FTSE, the S&P should not be trading at new highs.
What will happen at some point in the next few weeks is that the S&P will collapse to catch up with the FTSE. The S&P is artificially boosted by the Fed and Trump. When the index prices in good news and the news does not materialise or some bad news emerges, the index will experience a set back.
You can see at the moment the stock market is resilient because people hope some good news will come out after tomorrow’s FOMC meeting and from the US-China trade talks. Trump said he expected to sign a significant part of a trade deal with China.
Very often you see a strong market ahead of the FOMC meeting then markets go down after the meeting either because the news was priced in or the Fed disappoints investors. Therefore it is possible the markets will remain at these levels until tomorrow night. But the next major move is down.