Wall Street trading legend Art Cashin says the market is in a 'wash and rinse cycle' driven by investors chasing trends

• Legendary trader Art Cashin told CNBC on Thursday that the market is in a "wash and rinse cycle" where investors trade on trends and not stock fundamentals.
• The UBS floor director said the market is driven by its own "internal momentum" because investors continue to buy shares and push up a stock price even after it rallies.
• "Don't be looking for logic in a market that's temporarily illogical," he added.

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Art Cashin, UBS floor director, told CNBC on Thursday that the market is in a "wash and rinse cycle" where investors chase trends and stock prices frequently see sharp rises and falls.

The trading legend said that the market is driven by its own "internal momentum," and that's left investors frustrated. It could also be to blame for the recent stock sell-off.

He explained a trading scenario to demonstrate this internal momentum. First, investors see an opportunity for a bargain when the market goes down. They take a position, the stock rallies, and they buy more shares, rather than sell as the momentum continues. When the momentum stops, traders put in sell stop orders.

"They trail whatever the last sale is, and when the market turns," they exit, Cashin said. "That's why we've seen this volatile market. Up, shortly down, up again, sharply down."

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This internal momentum can be seen in technology stocks and other stay-at-home beneficiaries because there's no money to be made in any other sector, he added.

Cashin also said that the market isn't being driven by fundamentals like earnings results.

"Don't be looking for logic in a market that's temporarily illogical," he added.