The trading floor at the New York Stock Exchange is dark this morning in observance of the Memorial Day holiday. However, CME futures are open until trade is halted at 1:00 PM EST. As expected, today’s action has been limited. Modest rallies are being posted by the DOW, S&P 500 SPX, and NASDAQ futures amid sparse participation.

Holiday trading is always a challenge. Thin markets enhance slippage and widen the bid/ask spreads of many instruments. For now, it looks like most liquidity providers have taken the day off or are limiting risk exposure.

June E-mini DOW Futures Rally Above 25,500

Last Thursday, the sky was genuinely falling on equities bulls, with all three U.S. indices posting stiff intraday downtrends. However, Friday brought a positive close and this week has opened in the green for U.S. stocks.

Here are the levels I will be watching as Tuesday trading gets underway later this evening:

• Resistance(1): 38% Retracement of May’s Range, 25779
• Support(1), Psyche Level 25215

Overview: The remainder of the abbreviated session is very likely to remain quiet. However, that will all change Tuesday, with the bulk of institutional money returning to the markets. At that time, the 38% Fibonacci retracement of May’s range (25779) is going to be a key number in this market. If we see price fail to rally above 25750, then a bearish bias will be suitable moving into midweek trade.

Ultimately, the jury is out on the current state of the U.S. indices. Long-term trends are bullish, but May has been a miserable month for anyone long these markets. As we roll toward June 1st, it will be interesting to see if stocks mount an end-of-month charge.