Art Cashin: Stock Market is 'Now Overbought'
JPMorgan Chase reported 36 percent rise in quarterly profit, topping Wall Street forecasts. Meanwhile, CIT Group said it would not get government bailout funds; many see bankruptcy as inevitable for the lender, with possible dire consequences for small and medium businesses.
Art Cashin, director of floor operations for UBS Financial Sevices, offered CNBC his insights on JPMorgan and the stock markets.
JPMorgan "had the TARP money foist upon them," Cashin declared. "They're having some difficulty getting it straightened out. But it's a very strong company."
However, he noted, there are negative ramifications of this week's events in the financials sector: "The outlook for the consumer, for credit, is not glowing."
But Cashin conceded the possibility of the markets making a "hairpin turn."
"On Friday, the American Association of Independent Investors said nearly 55 percent were bearish. Everybody was talking about the head-and-shoulders*."
"But the market then pulled the rug out from under them," and produced a 3-day S&P rally.
Cashin maintains that close-of-business tomorrow (Friday, July 17) may still yield concrete conclusions about market direction. But he says the field has shifted under that date:
"This market is now overbought. There is a chance for a reversal. We may have to extend that checkpoint into next week."
Watch the full interview for Cashin's take on jobless numbers.
* Head & Shoulders:
A technical analysis term referring to a chart formation in which a price exhibits three successive rallies, the second one being the highest. Believed by technical analysts to be a bearish indicator.
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Disclosure information was not available for Cashin or his company.