Art Cashin: The S&P's 'Break' Point Now

The factory sector in New York state shrank at a worse rate in June than during May, the New York Federal Reserve said in a report on Monday.

And the head of the IMF warned that the global economic recession may get even worse. What does it mean for the stock market?

Art Cashin, head of floor operations at UBS, offered CNBC his insights Monday.

Trading in the Dow — which had its biggest intraday drop since April 20 — and the S&P 500 currently "kind of looks like a stall pattern," Cashin said. "It's a rectangle moving lateral."

"The initial support in the S&P is 925 [to] 928, in a band there. If they break below that, then it does look like we're clearly moving down out of this rectangle."

Second Opinions:

Cashin sees a sobering pattern within the recent stock rally: the fact that utilities have done so relatively well. He said that's a sign of squeamish investors sticking with the "safe, quiet and staid":

"If you're going to pay any bill, it'll be the electric bill and the water bill."

But Cashin does take heart in the firming U.S. greenback.

"I was getting a little worried about the dollar. I'm glad to see the rebound today."

Pointing to the meeting of the BRIC* nations tomorrow (Tuesday), Cashin declared, "That's why I was kind of surprised to see the Russian finance minister say there's absolutely no alternative to the dollar."

*Brazil, Russia, India, China
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Disclosure information was not available for Cashin or his company.