Art Cashin: The one thing I'm watching this month

Investors could see the stock market "perk up" even higher than its record levels if commercial and industrial lending accelerates, veteran trader Art Cashin told CNBC on Tuesday.

"The one thing I am going to keep an eye on for the next month or so ... is lending appears to be moving up," said Cashin, UBS' director of floor operations at the NYSE. "Commercial and industrial loans are out there—not so much mortgages."

Cashin said a pickup in lending might increase velocity in the money supply, which means a rise in the rate of transactions in an economy. Speaking at midday as stocks declined from their record highs, Cashin said the market needs more active participants.

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If volume—or trading activity—increases, then "maybe we can start a stampede," Cashin said.

"Historically, volume is validity," Cashin said. "If you get big volume, that means a lot of people are voting. You wouldn't want to have an election where eight people decided who the president was. You need to see big numbers. They're not there yet."