The S&P 500 continues to fall rapidly as investors move away from tech stocks, leaving the index trading around 30 per cent lower than its 2020 price high.
S&P 500 analysis shows that the index is rapidly approaching critical technical support, around the 2,345 level.
Current technical analysis of the S&P 500 indicates that the index could fall towards the 1,300 level if the 2,345 level is breached.
S&P 500 medium-term price trend
The S&P 500 remains under intense downside pressure as fears over the global spread of the coronavirus causes traders to move away from tech stocks and into cash.
Worryingly for the index, stocks have failed to react to the massive stimulus package released from the Federal Reserve this week.
S&P 500 technical analysis shows that the index could decline by a further 1,000 points if the 2,345 support level is breached.
The daily time frame shows that a large head and shoulders pattern will form if the price reaches the 2,345 level.
Given the magnitude of the decline currently underway, the price could fall straight through the 2,345 level, however, minor upward corrective moves could occur from the neckline of the pattern.
S&P 500 short-term price trend
S&P 500 technical analysis shows that the index is bearish over the short-term while price trades below the 2,700 level.
The lower time frames currently show that a series of bearish head and shoulders patterns have formed and been activated during the latest decline.
According to the 30-minute time frame, the latest head and shoulders pattern playing out to the downside is pointing to further losses towards the 2,100 level.
If the 2,100 level is achieved, traders may use corrective moves back towards the 2,345 level as a major selling opportunity.
S&P 500 technical summary
S&P 500 analysis indicates that a drop towards the 1,300 level may occur if sellers gain traction below the 2,345 level. The 2,100 level is seen as a near-term bearish target.