US Markets

As the market rally narrows, ask yourself how much of it is real, Art Cashin says

Watch oil inventories and more: Cashin

The market rally is thin despite positive economic data pushing U.S. stocks to new highs, and that can worry investors about its authenticity, Art Cashin told CNBC on Wednesday.

"It's not a very broad rally as it had been a couple weeks ago. So when it begins to narrow, you do worry about that," Cashin, director of NYSE floor operations at UBS, told "Squawk on the Street."

Driving what he called the "very narrow" rally were and , Cashin said, both of which are frequent chart-toppers in their respective sectors, financials and technology.

"The volume was nothing to write home to mother about," he said. "So you look at those things and say, 'How much of this is an illusion and how much of it's real?'"

Cashin added that the market's "theoretical resistance" is also bubbling up, with the bouncing in a range of 2,337 to 2,341.

"If they punch through there, they could possibly get a tailwind and ... kind of another minor breakout," Cashin said.

After Cashin's interview, the index was up just under 0.2 percent, at 2,341.38.

The floor director said traders and investors should be weary of upcoming market movers on Wednesday like Fed Chair Janet Yellen's question and answer in her congressional hearing and the Department of Energy's crude inventory data.