"We may be looking at what they call the Thursday syndrome," Cashin said, which goes as follows: Selling on high volume on Thursday, followed by mediocre trading on Friday, very heavy selling on Monday followed by capitulation on Tuesday, with a reversal in the afternoon.
So far, so good: Mediocre trading in progress. Stay tuned.
(To have Art Cashin walk you through it, click on the video at left.)
If it offers any insight into how this market is behaving today: General Motors , which fell to a 53-year low in the prior session, was the biggest percentage gainer on the Dow.
Shares of KB Home tumbled after the homebuilder reported its loss widened to $255.9 million from $148.7 million a year earlier. Revenue plunged more than 50 percent to $639.1 million as the number of homes sold dropped by 41 percent and the average price fell 17 percent.
Financial shares wobbled after Thursday's bloodbath -- regional banks and a handful of Wall Street brokerages were higher but Merrill Lynch and Lehman Brothers continued to slide.
Merrill Lynch dropped after sources inside the firm told CNBC that writedowns will likely be between $3 billion and $5 billion.
Earlier, Lehman Brothers had estimated that Merrill would write down as much as $5.4 billion and lowered its price target on Merrill stock.
Lehman Brothers shares skidded after bank analyst Richard Bove of Ladenburg Thalmann said he now expects a wider loss from Lehman this year and cut his price target on Lehman stock to $27 from $30.
Today is expected to be one of the heaviest volume days of the year, with the annual Russell rebalancing taking effect. The Russell 3000 will delete underperforming stocks and add stronger companies, moves that often generate huge trading amounts on companies that otherwise draw relatively little attention.
In economic news, personal spending rose 0.8 percent, more than expected, in May as the stimulus checks helped put a few more dollars in household budgets. But consumers' moods haven't improved: The University of Michigan reported its gauge of consumer sentiment dropped to another 28-year low in June.
Oil hit a new record near $142 per barrel, before pulling back below $141 a barrel , despite the House of Representatives voting tocurb speculation in the energy markets.
Several strategists say now's a good time to short stock markets. Marc Faber, editor and publisher of "The Gloom, Boom & Doom Report," told CNBC that investors should be buying gold, not oil.
The Federal Reserve has "misled" the markets by not acting to curb the fall in the dollar, triggering inflation, and it should let the big investment banks fail or risk failing itself, Faber added.
Also on a pessimistic note, the global economy will struggle more than people now think, as the credit crunch spreads beyond housing and financials, Gerald Hassell, Bank of New York Mellon president, told "Squawk Box Europe."
Asian stocks plummeted, with China's stock market down more than 5 percent on market talk that the central bank may increase the interest rate as soon as the weekend, while European stocks fell on worries over the corporate outlook.
Bristol-Myers shares rose after Bernstein raised its rating on the stock to "outperform" from "market perform."
In mergers and acquisition news, InBev has filed a lawsuitto confirm that Anheuser-Busch shareholders can remove the U.S. brewer's entire 13-member board without cause, a move expected to turn its $46.3 billion takeover bid hostile. That came as Anheuser-Busch's board formally rejected InBev's $65-per-share offer to acquire the company, saying it's financially inadequate.