In late 2014, there was concern that the S&P 500 was in the midst of a megaphone topping pattern. While noise has died down surrounding that (valid) concern, it is still in play, and a revisit of that pattern illustrates a clear road map to 2200 for the S&P in the upside scenario, and 1700 for the S&P in the downside scenario.

Currently, the S&P has been eking out new highs on what seems like a daily basis. As the index attempts to clear two hurdles of resistance, both the 161.8% Fibonacci extension from the 2007 high to the 2009 low, and resistance of a rising channel, it's setting itself up for a push to 2200, which is megaphone resistance.

On the flip side, the lower jaw of the megaphone pattern points to 1700 for the S&P, which is just shy of the 200 week moving average, and 200 points shy of an old resistance level, which may turn out to be a new support level, 1500. 

There is no telling when a 10% correction will happen, let alone a 20% sell off. Today, both positive and negative news flow seems to push the market up, and thoughts of a potential bear market are dismissed immediately. 

But, when in fact the market does come down from its all time highs, this megaphone topping pattern formed in late 2014 should provide a clear road-map for investors and traders. While a push to 2200 seems more than likely given the current state of the market, only diamonds are forever, and the S&P is no diamond.

Any strong push above megaphone resistance on rising volume would dismiss this topping pattern.

This is a long term view, and could take years to play out.

A drop from 2200 to 1700 is a 22% drop. In other words, a full fledged bear market. If this price action occurs, I'd be eyeing the 1500 level to see if old resistance turns into new support. But for now, the trend remains up.