S&P 5850 has been the most important “line in the sand” for stocks since the pullback from the 6000 level in November 2024. With the SPX closing below that 5850 level on Friday, we see further corrective pressures with the 200-day moving average as a reasonable downside target. Today, we’ll break down a series of projection techniques that have helped us hone in on this potential area of support. The Break of 5850 Completes a Head-and-Shoulders Top One of the most widely-followed patterns in technical analysis, the fabled head-and-shoulders topping pattern, is formed by a major high surrounded by lower highs on each side. After the S&P 500 established a lower high in December, we immediately started looking for confirmation of this bearish pattern. To confirm a head-and-shoulders top, and initiate downside targets on a chart, the price needs to break through the “neckline” formed by the swing lows between the head…