Stock Market Commentary: Bears build pressure

Continued selling across markets was combined with an increase in technical weakness. Worst hit were small caps; the rising channel broke to the downside and even nicked a break of the 50-day MA.

The Nasdaq closed with a MACD and on-balance-volume 'sell' as the 20-day MA comes under pressure.

The Dow took it a step further with a registered distribution day in conjunction with a MACD and OBV 'sell'; the losses were enough to redraw the bearish divergence in the MACD.

The doji for the semiconductors at the 50-day MA doesn't inspire confidence as the bull trend disappeared [-DI > +DI; ADX < 20]

All eyes should be on small caps given their importance in leading markets. Today's break of the bull channel likely means a scrappy sideways pattern to follow.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.

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