If it hadn’t been for the last hour of selling, yesterday would have been considered a consolidation day. But something spooked investors in the final hour of trading, and that something most likely was the lack of an agreement on the debt ceiling issue. Each day that passes without a resolution in place will cause increasing nervousness on the part of investors. The panic, however, is still in check if we scour the charts.

The CBOE Volatility Index (VIX) still only trades near 20, which is very moderate given the massive concerns overhanging the markets. And as I said yesterday, “It is important to remember that the global debt concerns haven’t significantly affected corporate earnings.”

The bond market too is holding up well, relatively speaking, and yields haven’t widened much in recent days. Yesterday, I showed a chart of the 10-year U.S. Treasury note futures contract, and here is the yield on that same instrument. Remember, price and yield have an inverse relationship, so the downtrend you see on this chart is the increase in price/decrease in yield for 2011 thus far. This doesn’t mean Treasurys can’t sell off. I’m just pointing out the relative calm so far in the bond market despite the debt ceiling debates.

Technology again performed well, and the Nasdaq 100 led the broader market, and in contrast to the S&P 500 and the Dow Jones Industrial Average, actually closed in the green for the day.

Yesterday, I pointed out the Dow Jones Transportation Index and mentioned the longer-term topping patterns in place. Today, I have the chart of the industrials sector and note the head-and-shoulders-like pattern in place so far in 2011. This pattern will take time to work out, but it is consistent with other longer-term topping patterns that I mentioned yesterday.

The Russell 2000 small-cap index displays similarities to the above chart of the industrial sector, but still hangs on to the 50% retracement level from the June upswing and the 50-day simple moving average (yellow line).

After yesterday’s session, my stance is unchanged. I continue to see the path of least resistance for stocks as up in the very near term, i.e., the next few weeks, followed by darker skies.

• See Sam Collins’ Daily Market Outlook: Is it Time to Go Bargain Hunting?
• See Sam Collins’ Trade of the Day: Base Metals Fund Gearing Up for Major Breakout

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.