Will it keep the market down and get us to plunge to new lows? I am doubtful of that right now.

Can we come down and have another test of the lows? Sure. That would be in keeping with my scenario of fits and starts. The entire decline, as I explained yesterday, was not all-encompassing and therefore the upside should also be filled with group rotation.

The financials had their day in the sun last week. Tech never really got hit in the entire decline. Heck, Nasdaq didn't even make a lower low (yet the oscillator did, which is not good) in the entire decline, nor did the Russell 2000. This week, it's the commodity stocks' turn on the upside, and I suppose tech will take its turn on the downside.

What was fascinating to me about yesterday's action, aside from the dullness, was how it seemed the financials had finally exhausted themselves. Just look at AIG (AIG - commentary - Cramer's Take). The only news was an upgrade from Bank of America, and the stock was up more than 10% after having rallied 25% last week? The stock then proceeded to give it back slowly over the day. That's how you knew it had finally exhausted itself.

The Bank Index (BKX) managed to cross the downtrend line last week and is now in the process of pulling back. The real test is to see if it can stay above that downtrend line on a decline.

The test would be on a trip back down to the black line. Steep trend lines such as the one on the chart always make me think of the expression, "Trend lines are made to be broken." No uptrend can stay that steep for so long, just as no downtrend can stay that steep for so long. Therefore the real test comes if it can test that trend line (around 57) and hold on and re-rally.

I suspect we will now see the BKX trade between about 57 and 67. I know that's a big range, but how else can the banks build bases if they don't do some work? "V" bottoms are incredibly rare, so I wouldn't count on one.

I also noticed that no one talks about the VIX anymore. Where'd all that chatter go? It has now come down from 30 to 22, and yet the market hasn't gone anywhere in two days in terms of the averages. In fact, the VIX fell 4% today when dullness was the name of the game. That, along with the low equity put/call ratio (70%), should also highlight that this bottom will not look like the March low. It will be choppy.

Group rotation has been in place on the downside and it ought to continue on the upside.

Overbought/Oversold Oscillators

For more explanation of these indicators, check out The Chartist's primer.