If the test fails, what are you going to do? Treat the low as if it were your point of entry and set a stop 5% or 7% or 10% below that? If you do, know that a million other people will be doing it too. There are some really sharp professional traders and hedge funds that know what you are going to do. So just when you get stopped out the market rises. You cannot win once you are in a losing position.
The plunge protection team really really wants any test to succeed. They will be prepared with Goldman Sach’s signal to start buying.
I am not saying the market can’t go much below the recent low. I am just asking what are you going to do if it does.