"If oil goes below $81 and begins to go below $80, that might begin to put pressure on things," Cashin, director of floor operations at the New York Stock Exchange for UBS, said on "Squawk on the Street."
IBM shares lost roughly 7 percent in mid-morning trade after the technology giant and Dow component posted third-quarter earnings short of estimates.
"The market [is] trying to decide if IBM is simply a one-off and it's not going to effect the rest of earnings season and see where they can go from here," Cashin said.
Still, stocks mostly climbed on Monday with the S&P 500 snapping back after its longest weekly loss streak since 2011. To Cashin, who has nearly 50 years of experience on Wall Street, the markets could be nearing a bottom.
"You got down to almost single figures in stocks that were trading above their 50-day moving average and that's a pretty rare event. That's heavily oversold," he said. "My gut tells me we might have to do one more re-test of those lows, however."
—CNBC's Kate Gibson contributed to this report