Art Cashin: The 'Super-Rally' Scenario Now

Intel and Goldman Sachs posted strong quarterly earnings; and two key manufacturing indexes showed signs of recovery Wednesday. What does it all mean for the stock markets?

Art Cashin, director of floor operations for UBS Financial Services, offered CNBC his insights.

He repeated his theory that the conclusion of this week is going to offer concrete answers about the market's direction -- one way or the other.

"For now, it looks like the bulls have taken the ball that the bears fumbled earlier this week and are continiuoing to move it," Cashin said.

"So far, we've seen a couple of things nobody expected."

Cashin weighed in on the oft-discussed "head-and-shoulders" pattern, taken as gospel by many analysts — but which seems to be disrupted now.

"The trouble with the head and shoulders pattern is it started to get accepted by everybody," Cashin said. "And the market likes to confuse the most amount of people — usually the majority."

The pattern "broke down through the 'neckline,' which by classical, technical thought, should lead to 820, 827. But instead, the market reversed back up through the neckline."

"We have to watch the area around 830 — the right shoulder."

Cashin called this reversal of classical theory a "failed breakdown syndrome" — which, he said, could produce a "super-rally" scenario.

Cashin says one S&P number "above the head" should worry shorts. Watch the full interview to find out.

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Disclosure information was not available for Cashin or his company.