Time to Cashin

Thinking about pulling the plug on the stock market? If you haven't already, today might be the day to cash in.

Art Cashin, director of floor operations at UBS, believes the current stock rally will be short-lived. [So do I.]

But will the pullback be a minor dip — or a severe dive? He said it's too soon to tell definitively — but investors should keep a sharp eye on a 3-day period next week:

"[July] 15th to the 17th will tell us how meaningful the correction is going to be."

"We'll know the course clearly by the 17th," Cashin declared. -- CNBC Stock Blog

Disclaimer: covertress holds no positions.

~ ~ ~

Art Cashin's Comments: Lessons from 43 Years on Wall Street

Dot Com Bubble - (Make sure you have Real Player installed to listen.)

No ability to listen? Art recommends this book:

Extraordinary Popular Delusions And The Madness Of Crowds by Charles Mackey. (read online or order from Amazon.)

Why do otherwise intelligent individuals form seething masses of idiocy when they engage in collective action? Why do financially sensible people jump lemming-like into hare-brained speculative frenzies--only to jump broker-like out of windows when their fantasies dissolve? We may think that the Great Crash of 1929, junk bonds of the '80s, and over-valued high-tech stocks of the '90s are peculiarly 20th century aberrations, but Mackay's classic--first published in 1841--shows that the madness and confusion of crowds knows no limits, and has no temporal bounds. These are extraordinarily illuminating, and unfortunately, entertaining tales of chicanery, greed and naivete. Essential reading for any student of human nature or the transmission of ideas.

In fact, cases such as Tulipomania in 1624--when Tulip bulbs traded at a higher price than gold--suggest the existence of what I would dub "Mackay's Law of Mass Action:" when it comes to the effect of social behavior on the intelligence of individuals, 1+1 is often less than 2, and sometimes considerably less than 0.