Art Cashin: The S&P's 'Head and Shoulders' Number

The Dow is down 5.65 percent YTD and the S&P 500 had its lowest closing value since June 23 (as of this writing). With earnings season upon us, what's the stock-market outlook?

Art Cashin, director of floor operations for UBS Financial Sevices, offered CNBC his Monday insights.

"Earnings are going to be a critical thing — but not so much earnings alone," Cashin said.

He believes the real question will be: "Can we finally get clarity in the outlook? Can people look five months ahead and say something?"

What if earnings disappoint?

"That's the great debate. They lowballed them when they thought the wheels were coming off the locomotive. Then came the green shoots" and some possibly mistaken optimism, he noted.

"That's why I think we're going to look more closely at the outlook than at the [current] earnings."

Cashin declared his latest danger point for the S&P 500:

"If we get down through 877 on the S&P, people will be talking about a 'head-and-shoulders' — and that will not be too happy," he warned.

Financial Glossary: Head & Shoulders

A technical analysis term referring to a chart formation in which a price exhibits three successive rallies, the second one being the highest. Believed by technical analysts to be a bearish indicator.

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Disclosure information was not available for Cashin or his company.