The euro zone debt crisis and the U.S.'s failure to break its impasse on the deficit are overshadowing the start of earnings season for the markets, Art Cashin, UBS director of floor operations, told CNBC in an interview.
"If you had blowout earnings—that might help a little bit, but it's now back to (the debt crisis)," Cashin said.
He told CNBC, "The S&P stopped almost dead [Monday] on its fifty-day moving average, and I think that gave people a little hope. Now we have these two little bits of rumor running around about the ECB possibly buying some of the Italian and Spanish paperand rumors that there might be some kind of progress on the debt ceiling."
Cashin adds that the crisis in Europe, more specifically in Italy's political and liquidity woes,is buffeting the global markets. There is a fight going on between the Italian finance minister and the premier, and it is making market movements more exaggerated, he said.
"It looks very much like it looked down here [on Wall Street] in 2008, when they went around picking on the brokers and bankers, the vulnerable. Then there goes Bear Sterns—they had to be merged, and then the CDS spreads, and all the rest happened. That is exactly what is happening," Cashin said.
He added, "This quick reversal has left you with what amateur technicians call 'island reversal.' You are way up here, you gapped up there and you gap back down...and it often could mean a temporary top."
Watch: Recent interview with Cashin
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Disclosure information was not available for Art Cashin or his company.