Cashin had told CNBC last Friday there was a 50/50 chance of the Dow surpassing the milestone before the end of the year.
Andy Brenner, global head of emerging markets fixed income at National Alliance, also said the selling in stocks appeared related to selling by pension funds, which would have to rebalance their holdings before the end of the year, after the stock market's recent run.
Brenner said the rebalancing between stocks and bonds may have influenced the government's auction of $34 billion five-year notes Wednesday.
"As for reallocation, it makes perfect sense in a light liquidity week to buy Treasuries in the auction and sell equity futures at the same time. Look for similar move at tomorrow's seven-year. ... Looks like you can kiss Dow 20000 goodbye for 2016," he wrote in a quick note.
The Treasury auctions $28 billion seven-year notes Thursday at 1 p.m.
Cashin also said the pension fund rebalancing appeared to be a factor in the stock market sell-off. He said there were reports of an estimated $35 to $50 billion in equities to be sold as part of the moves by pension funds to rebalance their stock and bond holdings. Wells Fargo estimated that equity selling would amount to about $32 billion but pensions would have to buy $20 billion in bonds.
"It's selling into a vacuum here. There's not much bidding going on. They tried and now there's the weight of the potential end-of-year selling. … I thought this was their last best chance. They should be under negative pressure for the last two days [of the year]," said Cashin.
Ian Lyngen, rates strategist at BMO, said the strong demand in the $34 billion five-year auction Wednesday could have been foreign buyers, and he will watch the seven-year auction to see if there is similar demand. The indirect bidders totaled 71 percent, the most since 2006.
There are initial claims data and international trade, both expected at 8:30 a.m. ET on Thursday.
"Wholesale inventory figures could influence expectations for third-quarter GDP. We have seen GDP estimates swing rather sharply on trade numbers," said Lyngen.
As for the Santa rally, it seems to have fizzled. Stock Trader's Almanac describes the Santa rally as occurring in the final five trading days of the year and the first two days of the new year. So far, stocks are now lower. The S&P 500 is off a half percent since Thursday, and the Dow is off 0.4 percent.
When stocks rally during that period, it is expected the market will start off the year on a strong footing. If not, there are expectations it could be weaker.
There is also oil inventory data at 11 a.m. and natural gas inventory supply data at 10:30 a.m.