Article talks about stock market prediction in Dec 2022. If the Stock market will recover , Key indicators for stock market recovery

Year 2022 is almost over and it has not been so good, which was down around -20% till Q3. Various parameters including technical, Federal Reserves, Earnings, Recession fears, International war pressure impacting trade etc will be discussed in this article.

Why is Stock Market Down in 2022? 

The 2022 bear market is not caused by any confirmed parameters of Recession. This decline around -20% in stock market is due to Federal reserves increasing Interest rate in an expedited manner, which has impacted the 10 Yr yield to increase. This can be the only reason. There are few others related to unexpected earnings results from big tech giants but that has less contribution for this decline in Stock market.

Will the stock market recover in 2022?

Considering 3 parameters  – News from Fed, GDP and Technical charts, there are high chances that stock market has reached bottom for 2022 and will not go further down. Let’s discuss this below.

Last week of Nov 2022, there was news that Fed will do small hikes compared to earlier hikes in 2022 which will result in less inflation rate and reduce 10 year yield percentage. This will result in the S & P index rising.

In the third quarter of 2022, the US economy expanded at an annualized 2.9%, above estimates of 2.6% and expectations of 2.7%. While the fourth quarter’s GDP is anticipated to grow by 4%, this lowers the likelihood that the market will decline in 2022

Let us see some technical charts indicators.

Current price is at a critical level. it has a resistance at 200 Day moving Average, in month of August 2022 at this level with RSI above 70 and market reversed down. Today 30th Nov it at a similar level of 200 moving average and it has closed just above 200 day moving average. RSI is still at 62. If Market show a green candle above 200 Moving average, there is a high possibility that market may go up in Dec 2022.

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