Countdown with Cashin: Watch for this year-end phenomenon

It's the penultimate day of the trading year, and that means investors should watch out for a delayed selling phenomenon, said Art Cashin, UBS director of NYSE floor operations.

"A lot of people assume that if you have a stock that's done very well this year, you want to postpone selling it until after the first of the year because that carries you a whole year ahead tax-wise," Cashin told CNBC's "Squawk on the Street" Wednesday. "With that in mind, these two days, we've seen in the last five years a phenomenon develop where people start shorting those stocks, figuring they will be weak at the beginning of next year."

Cashin said that part of the delayed selling pattern can be attributed to the levels of uncertainty surrounding the market this year. And while stocks generally perform well in January, that hasn't necessarily been the case over the past two years.

"I think people really want to get into next year and see if it's a 'Sweet 16,' " Cashin said. "It's an election year that has a mild upward bias to it, so we'll see what they can pull together."

Despite this upward bias, Washington Crossing Advisors' market strategist and portfolio manager, Kevin Caron, told CNBC's "Squawk on the Street" that investors need to have a much more realistic outlook about their expected returns, citing "flattish earnings" and a slow-growth economy.

"If you look across asset classes, generally there is really very few places, if any, to make money this year," he said on Wednesday. "You look at stocks, they were flat. You look at bonds, they were not returning positive numbers, and commodities certainly were down."

Carson said a turn in the market depends upon what happens with earnings in the new year.

"If we continue to make progress, eventually that gets back on its feet," he said. "If not, I think you'll have a languishing market for a while."