Example

This isn't the best example because the market conditions are vastly different, but it should be close enough.

 On May 2nd and 3rd the market tested resistance and failed, this is what shorts are looking for right now.

Fast forward, the conditions aren't the same because we were coming off a failed bounce that we already knew was failed on May 1st. Since then a lot of shorts have come in to the market, thus the 2012 short interest highs in the NYSE from yesterday. We have positive signals right now, the market has already declined, but the shorts at this moment are likely shorting in to this strength today on what they so far are reading as a failed test of resistance. This obviously would bring more shorts in, maybe some who covered earlier in the day will re-enter in this area. At the same time the momentum chasing crowd or the few who have been expecting a bounce are discouraged that the market hasn't broken through resistance, it's a strong area of resistance and will take a little goosing from the market to break it.

Psychologically that's what is happening right now.