The Dow's break above 25,000 on Thursday shows that investors are not losing confidence in the markets, closely followed trader Art Cashin told CNBC.
The Dow milestone "is a psychological thing," said Cashin, UBS' director of floor operations at the New York Stock Exchange. "But the important thing is the markets had a kind of change of attitude."
Cashin said that last week Wall Street analysts were worried about the so-called Santa Claus rally, which often occurs in the last week of December through the first two trading days of January. He said it appeared the rally would not come and it would be sign of things to come in the new year.
"We were thinking we were going to have to put Santa's face on a milk carton and that the year was not going to be bright," Cashin said on "Squawk on the Street."
"New money for the new year kept pouring in," Cashin continued, "[and] seems to keep pouring in today."
The market's run higher could also set up an additional rally, Cashin predicted.
"We've had a series of years in which we had an outstanding thing like a 20 percent rise. And if you get just the right kind of action, you get a rather satisfactory 10 percent follow up. And I would take that in a heartbeat," Cashin said.