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Art Cashin: When the NEXT Rally Will Start

CNBC.com
Monday, 27 Jul 2009 | 12:12 PM ET

The stock rally turned tepid Monday as earnings news receded and traders lost their initial enthusiasm over strong new-home sales.

Trader Talk With Art Cashin
Art Cashin, head of floor operations at UBS, has the latest buzz from the NYSE.

Art Cashin, director of floor operation at UBS Financial Services, offered CNBC his stock-market insights.

Last week's rally was indeed concrete, Cashin said.

"The 2-week run was particularly impressive. You've got a Dow Theory buy signal; the market broke out to a higher high; it changed some of the charts."

But he added a sobering note: "We are heavily overbought now ...We may see a correction this week."

Cashin based his projection on "looking at the number of stocks above their 10-, 20- and 30-day moving averages."

How bad and how long?

"I think it'll be a mild correction...ending about August 2 to the 5th."

Then, Cashin said, markets will most likely enjoy a "very impressive but head-fake rally — until the fall." Then stocks will take "another leg down."

For Cashin's take on the dollar, oil/commodities and U.S. production, watch the full interview.

More from Art Cashin:

Click for CNBC's Art Cashin Video Gallery

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CNBC's Companies in the News:

Citigroup

E*Trade Financial

General Electric*

Corning

Verizon Communications

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*General Electric is the parent company of CNBC.

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Disclosures:

Disclosure information was not available for Cashin or his company.

Disclaimer

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