Japan's surprise vote to significantly expand its stimulus program, and the country's Government Pension Investment Fund's (GPIF) decision to increase its international and domestic stock exposure are boosting stocks all around the world, Art Cashin said.
"It's Halloween, and we got a treat," said the UBS director of floor operations at the NYSE.
Japan soared to a seven-year high. China closed at a 20-month high. Europe was solidly in the green, and the Dow Jones Industrial Average touched a record high after the Bank of Japan (BOJ) voted to up the central bank's annual government bond purchases by the tune of 30 trillion yen to 80 trillion yen, or $725 billion. The world's largest pension fund GPIF also separately said it will double its domestic and international stock allocations from 12 percent to 25 percent each.
Cashin explained markets are on standby as investors try to determine what these dramatic steps from the world's third-largest economy mean.
"That's today's question, which in turn has prompted a huge amount of short covering and has taken the market up to new highs," he noted.
U.S. stocks jumped at Friday's open and have stayed near their highs as traders bought riskier assets, like growth-sensitive stocks, and dumped safe-haven plays, such as gold. Market internals are positive with three-to-one advancing-to-declining stocks and about a fourth of S&P 500 components at new highs.
There is an old adage that says "Sell in May and go away," signaling stocks usually fall between May and October as investors pull back. That, however, has not been the case this year nor last. The S&P 500 is up 6.8 percent since May and rose 9.9 percent last year from May to October.
Stocks usually rally in the final two months of the year and, as Cashin points out, Monday is when people are supposed to come back into the market.
"It would be ironic [if November was a down month]," he said.
The S&P 500 is up roughly 2 percent this month.