A head-and-shoulders top is forming on the S&P 500 weekly chart, suggesting there is significant downside risk, says Brian LaRose, Technical Analyst at United-ICAP.
The pattern neckline is around the 1813 to 1831 level and if this level breaks then the 2000 and 2007 highs (at around 1517) will become the primary target. See Chart 1.
Between here and the 1517 target, LaRose can only identify a few candidates for intermediate support: 1787.50 (the 0.236 retracement), 1720.75 (the 200 week moving average) and 1691 (the uptrend support line). See Chart 2.