Overbought, up against resistance in a down trending market

I have a feeling the market may be setting up for another test of the lows soon. Notice in Feb. the S&P pushed back up to the consolidation zone of the T1 move and backed off. The Nasdaq however didn't even come close to testing the midway consolidation. Now it's a different story. Both indexes are pushing up into this resistance level. Now on top of that both indexes are about as overbought as they have gotten short term during this entire decline. Add in the fact that the selling into strength as of the close friday was the highest ever seen in the SPY ETF and I think we have the setup for another test of the Mar. lows. At the very least the NDX needs to fill at least a couple of the gaps. Notice the low volume on the recent moves in the cubes. In the past the odds have not been good when the cubes have gapped up by large amounts on low volume. I think we need to see some kind of test on the NDX if this rally is going to be sustainable. I will be watching the money flows buying into weakness as a signal to cover shorts. At the moment I'm still of the opinion that we have seen the 4 year cycle low but that may change if the market violates the Mar. lows by any significant amount.

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