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S&P Must Hit 1,101 to Stay Up: Charts

The S&P 500 index must hit the October high to avoid a 10 percent correction, and if the market does correct, the VIX volatility index could fall below 20 percent, Chris Zwermann from Zwermann Financial told CNBC Wednesday.

“We had a high of 1,101 last time (in the S&P) and now yesterday we reached more or less 1,095,” he said, adding that “the question is 'are we building here some kind of shoulder-head-shoulder (pattern).'”

“Five points decides for the future,” Zwermann said, because if the markets can reach the October high, it will avoid a 10 percent correction.

On the other hand, if the S&P can’t manage to hit the October high, it will fall to 1,030 along the neckline of the shoulder-head-shoulder model, he said.

The possible correction in the S&P could push the VIX back to 15 percent “which would be very, very, very low volatility,” he said.

-For the full interview, watch video above

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