U.S. stocks are in the red following Monday’s Wall Street cash open. Initial trade has the major indices are off, led by the DJIA (-185), S&P 500 SPX (-22), and NASDAQ (-64). With no market-moving events scheduled for today’s U.S. session, we may be looking at a prolonged period of consolidation.

On the debt front, there are two U.S. Treasuries auctions scheduled for a bit later on this morning. The 3 and 6-Month T-bills will be auctioned at 11:30 AM EST. Previous yields came in at 2.41% and 2.47% respectively, up significantly year-over-year. While only a peripheral economic event, there will be some investors scrutinizing the returns. If we see a big move in yields one way or the other, then there will be those citing a pending market meltdown or sustainable strength. Either way, it is a good idea to not put too much emphasis on today’s debt auctions.

March E-mini S&P 500

Friday’s trade of March E-mini S&P 500 futures ended in a stalemate and near doji formation on the daily timeframe. Overnight traders viewed this as a signal of trend exhaustion, piling into shorts ahead of the Wall Street open.

There are two levels on my radar for the remainder of the trading session:

• Resistance(1): 78% Current Wave, 2560.75
• Support(1): Bollinger MP, 2508.75

Overview: It is tough to overstate how important the 2600.00 psyche level and the 78% Current Wave Retracement (2608.25) are to this market. If we see these areas taken out, then price is likely to challenge 2690.00 and 2700.00 in short order.

In comparison to the action of late-December, the daily trading ranges in U.S. stocks have been tight. On the surface, it appears as if a breakout is setting up in the March E-mini S&Ps. Only time will tell, but a directional move may be in the offing for later this week.