Watch Art Cashin: Why the Nasdaq's getting slammed

Cashin says: Fear's a contagion

Art Cashin said worries about a "contagion" are helping to deflate the Nasdaq.

Cashin, UBS' director of floor operations at the NYSE, told CNBC's Bob Pisani around midday that the Nasdaq's weakness in recent days is not just the result of its overvaluation.

"It's the idea that some of these people were playing, and playing pretty hard, maybe with liquidity on their side. So the fear is kind of a contagion. A very, very mini-2008 kind of routine where the hedge funds and others bought into the easy stocks, the momentum stocks, and are now having to pay dearly for being in them."

Cashin said he expects the market will continue to "take its pulse" and he doesn't think the volatility is over.

—By CNBC's Alex Crippen. Follow him on Twitter @alexcrippen.