The Fed's announcement this week sent all markets higher in line with our projections and so far in Friday's session it was the Euro that provided the 'real' reaction.

Thursday's gains for the Euro were virtually all wiped out in Friday's session in which the currency did not agree with the advances made by other markets in the previous session.

It will be an interesting opening to next week as we anticipated new highs for the Dow Jones this week in which markets gapped higher on Thursday. However we would expect that gap to close next week after which a total reversal could well be on the cards.

Four Hour Euro Chart

From Thursday highs a move of over 200 points has occurred to the downside in which the Euro has barely managed to close above 140 this week. The price action halted at the yellow trend line above and should this yellow circled area break next week we would expect the decline to double to the red base line.

Note in our previous article we showed the indicator below was stating a total sell as the price moved to overly extended levels and an elastic effect was inevitable.

A snap of the red base line will complete the upside recent probes and will slide prices towards 132.

Dow Jones Four Hour Chart

From the chart above you can see our indicator below which shows the last time it went into the same territory marked by the small red circle. A decline of over 200 points developed soon after.

We expected a new high for the Dow Jones but the ferociousness of it shows the overextended nature of the indicator below marked by the larger red circle.

Also the range in which the Dow Jones has travelled over the last four weeks can be seen by the red lines. We would expect this breakout to close back to the upper red line over the next week and snapping the upper red line will then confirm it as a breakout - fake out.

The blue trend grid above shows how we expect this move to unfold further into next week.

The buoyancy has now gripped the markets and the bullishness is sky high. Talk of higher prices is the talk amongst the media and the recipe is now ripe for the contrarian to silently come alive.

Over the weekend more talk of higher prices will be key and literally no one will being talking about crashes! IRONICALLY they were all talking about crashes when the Dow Jones was at 9600 and TMS was urging all to view the price action at the time as a pure BUY but hey where are the crash talkers now? We at TMS will talk about it NOW, we may appear stupid but that's the name of the game, soon we'll say, 'we told you so'.

The Euro has kicked of price action in the real direction and we believe other markets will soon follow.

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