Why S&P could rally 12%: Technician Louise Yamada

It's been a difficult week for the market. But according to noted technician Louise Yamada, the S&P 500 could soon be in for a 12 percent rally.

Furnishing a chart of the large-cap index, Yamada says that 2,130, which is just a bit above current levels at 2,100, has become a key testing ground.

"What we'd like to see, ultimately, is for the S&P to turn around and lift through this resistance neckline, if you will. And that would happen if we went shortly through 2,130," she said Thursday on CNBC's "Futures Now."

So once that level is breached, how high could the market go?

"If we make it through 2,130, then we have 2,350 out there," Yamada said. That would represent 12 percent upside from Thursday's levels.

On the downside, the technican says it would not surprise her to see "a little bit of a further pullback," taking the market not quite halfway down to the 200-day moving average at 2,000.

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