The S&P 500 is on the verge of a technical breakdown. Here's the sell signal to watch for.

• The S&P 500 is on the verge of a technical breakdown, according to Fairlead Strategies' Katie Stockton.
• Stockton said that 4,180 is a key support level that needs to be preserved to prevent further selling.
• Extreme sentiment readings suggest to Stockton that a reversal in stock prices could be imminent.

The S&P 500 is on the verge of a technical breakdown, but Fairlead Strategies' founder Katie Stockton says don't sell stocks just yet.

That's because oversold extremes are flashing for certain indicators, suggesting that a rebound could be imminent.