NDX futures have put in a large hammer candle, signaling potential upside momentum building. This move comes as RSI has fallen to its most oversold level since late March, just before the sharp squeeze higher began. Additionally, futures are testing the 100-day moving average, which could provide additional support for a bounce. While it’s possible for the market to continue its downward trend, the current setup suggests that a violent short-term bounce may occur, potentially frustrating traders who have been bearish on the market.

It’s important to note that the 100-day moving average has historically provided support during periods of market volatility, and its current test could be a sign of stabilization. However, it’s also possible that the market may continue to correct lower before any meaningful bounce occurs.

Traders should keep a close eye on the RSI and other technical indicators in the coming days to gauge the strength of the potential bounce. A break above the 100-day moving average could signal a more significant turnaround, while a failure to hold above this level could lead to further declines.

Overall, while the current setup suggests that a bounce may be imminent, it’s important to approach any potential trading opportunities with caution and a solid understanding of market dynamics.