When I'm troubleshooting HTTP traffic, I reach for the invaluable Fiddler trace utility. It shows me everything going on over HTTP.
However, when you run Fiddler against a localhost URL you probably won't see any traffic, but you can easily fix this by simply adding a dot to the end of localhost in the address.
Intead of http://localhost:1234/MyApp/...,
use http://localhost.:1234/MyApp/... (it's subtle, but notice the extra dot after localhost).
This tip is widely known and documented (there are other workarounds listed at that link), but I just wanted to highlight this simple fix, because I've recently seen some who were not aware of it. It would be very unfortunate for someone to download and try Fiddler only to immediately discount it as "junk" just because of this. It is an awesome tool, and it's not just for IE, it hooks WinINET and is useful for watching other HTTP traffic like web service calls.