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Wall Street veteran Art Cashin finds the rally ‘discomforting,’ here’s why

A pause in the historic stock market rally could be just days away, according to UBS Financial Services Director of Floor Operations Art Cashin.

Cashin, a fixture on the floor of the New York Stock Exchange since 1964, believes the market has gotten ahead of itself. His call is based on the Dow's speed to 20,000, low volatility and what generally happens during a president's first year in office.

"That thousand point move from 19,000 to 20,000 was accomplished in 42 days. And, that's very fast. That's the second fastest thousand point move in the history of the Dow," observed Cashin recently on CNBC's "Futures Now."

And, it was done on very low volatility — a trend that isn't sitting well with the Wall Street veteran.

"It is a little discomforting to old timers like me to see you make brand new record highs — multiple record highs — and see the VIX hanging around ten," speaking about the "fear gauge" that serves as a barometer of market fear. "You start to worry 'is that a sign of complacency and where's it going?' said Cashin.

The VIX hit 10.30 on Friday, a two and a half year low. The latest move lower comes as the Dow, S&P 500 and Nasdaq trade around all-time highs.

'Can't get too comfortable'

Stocks have been acting favorably so far this year, as President Donald Trump signed executive actions to advance the Keystone XL and Dakota Access pipelines, and promoted other business-friendly policies. There's also been more speculation that he'll fulfill his campaign promise to pass tax reforms that will benefit corporate America.

However, markets historically give back gains despite the pro-business moves, according to Cashin.

"Most of the traders here think you may get a little bit of a pause or a slowdown. That's happened before. They think we may see a bit of a pullback in February, " said Cashin. "That's rather consistent with a first time president, and the pattern that follows him."

Cashin was optimistic stocks will bounce back this year. But at some point, he said, consolidation risks will return.

"I think then you can get another leg to the upside that may be multi-month and then you will have a longer correction after that," he said.

He added investors shouldn't discount any challenges that could come from outside the United States.

"Will there be a test from North Korea? Will there a be a test from Russia? You can't get too, too comfortable," Cashin warned.

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