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Watch Art Cashin: Oil below $80 may cause selling

Cashin says: Watch WTI below $80

Art Cashin, UBS director of floor operations at the NYSE, said stocks are selling off due to a pretty bad backdrop.

He pointed to concerns about ISIS and Ebola, the breakup of the AbbVie-Shire deal and weakness in Greece as dragging down major averages.

"We were set up for a negative opening anyway," Cashin said. "Then at 8:30 [a.m. EDT], we got absolutely dreadful economic data and that kind of compounded everything." Retail sales, producer prices and New York manufacturing reports all disappointed.

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Stocks dropped, rebounded, then dropped again during the trading day with the approaching correction territory, which is a pullback of 10 percent or more from a recent high. The Nasdaq Composite and Russell 2000 are already in correction territory, down 10 and 11 percent from their respective highs.

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Cashin warned if West Texas Intermediate crude oil (WTI) drops below $80, stocks could see another wave of selling. WTI slid as low at $80.01 in Wednesday's trade, putting it at a two-year low.

Oil does not normally drive the stock market; however, overall concerns about deflation, or falling prices, and a rising U.S. dollar are among the biggest factors pressuring stocks in the past several weeks.

—By CNBC's Kristen Scholer