Watch Art Cashin: Stocks MUST top this key level

Cashin says: Waiting for Yellen

Art Cashin said the stock market could drop significantly if it fails to break above a key S&P level.

Cashin, UBS' director of floor operations at the NYSE, told CNBC's Dominic Chu around midday that "Tuesday and Wednesday of last week, (we) formed a kind of double bottom right around 1737-38 (for the S&P 500 stock index), in that area, and it was far more powerful than even I thought. It's taken us back up to some significant resistance up here, 1798 to 1805, maybe even as high as 1810."

He said the market may be waiting right now for Federal Reserve chair Janet Yellen's testimony before Congress Tuesday, but in the next few days it will be very important for the S&P to break through that resistance.

"Otherwise," he said, "they'll be building up a kind of head-and-shoulder effect. For a market that's so uncertain, it looks at its own internals constantly, so that could provide more than a hurdle...They've (the bulls) got to get their act together soon."

If the S&P fails to break above the resistance level it's facing, "it would become, to some degree, a self-fulfilling prophesy" and could spark a significant drop.