Art Cashin: The Next S&P Resistance Level
Foreclosure filings in May dropped 6 percent from April — but were still up 18 percent from May 2008. Meanwhile, sales at U.S. retailers rose in May and initial jobless claims fell for a fourth straight week.
Art Cashin, UBS Financial Services director of floor operations, offered CNBC his market insights.
Despite the seeming positive of lower first-time unemployment claims, Cashin said that's only part of the story:
"Continuing claims continue to be a problem," Cashin said. "...It continues to look like if we get a recovery it will be a relatively jobless recovery and that'll be something we struggle with."
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Cashin quoted Pimco CEO Mohamed El-Erian's warning that there are hidden dangers to the recovery buried in the very signs investors are clinging to:
"It's not really green shoots; it's still more of Mohamed El-Erian's 'second derivative' — a change in the rate of change."
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He reiterated his analysis of the late-day rally pattern: Traders "come in and they hold their noses and put a bid into the market."
He sees a populist threat emanating from the congressional hearings into Bank of America's purchase of Merrill Lynch:
"A little political grandstanding could accidentally do some damage to the credibility of the Fed chairman while we're in a crisis. That could be far worse than anybody could assume."
Where is the stock market going? Cashin predicted:
"I see the next [S&P] resistance level if they get up to and through 1,000 — not too much above, about 1,050."
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Disclosure information was not available for Cashin or his company.