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Global Rate Cuts Gave Markets Few Minutes of Joy

Wednesday, 8 Oct 2008 | 11:50 AM ET

Now What? Traders are holding out hope for capitulation. That could come anytime, but it doesn't have to be this week or even next week. The big fear? The snow balling effect of fund redemptions will keep the selling pressure on.

Art Cashin, director of floor operations at UBS came by the NYSE cameraon "Squawk Box" today. "Stop looking at the numbers." (Well, we know that's impossible. We're glued to it like some horrible accident.)

Cashin also says: "Look at the psychology. You have to look for people getting very, very panicky. When they're out hawking Grandma's necklace, that's when we get a bottom."

(Ok, we're looking. People are scared. They are dumping lots of goods on Craigslist. Cars and boats are getting repossessed. People are dusting off their kitchen ware, cooking at home. Sale signs are popping up in front of weekend homes. But Grandma is still hanging onto her necklace. It's gold after all, and she's never trusted the stock market.)

Now, we're back to hand wringing. Cashin also said it would be odd timing for the big one - the big capitulating selloff to happen on a Wednesday. Other traders tell us they saw buying interest early in the morning, then sellers and now it's hard to say. Another aggravation. The short-selling suspension on financial stocks ends tonight. Traders thought that restriction hurt market players and now its return could hurt the market.

Cashin did say the reversal this morning was a positive because it could be the start of a washout. "The penetrating of lows yesterday did some serious damage that may last awhile," he said.

Questions? Comments? marketinsider@cnbc.com

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