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New York trader: Beware head-and-shoulders chart

A trader works on the floor of the New York Stock Exchange.
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A trader works on the floor of the New York Stock Exchange.

Thursday, we got what the market was waiting for out of the ECB and we will see if the outperformance of the European markets versus U.S. equities will continue.

I have been of the belief that money will continue going into Europe or bonds at U.S. equities' expense so the next few days are crucial in determining market direction.

The market—as all professional traders know—usually does what hurts the most at any given point so you have to ask yourself what that would be. In my opinion, that would be a reversal in this latest round of buying.

I have been right recently that the market would trend lower, but there are some levels in the S&P cash that you should be aware of for an indication of which direction we go from here.