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Art Cashin: When the NEXT Rally Will Start

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

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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