Bull Bear Investor Newsletter 3-13-2023

Thank you for being subscribed to the Bull Bear Newsletter. This is where I put together an analysis on the S&P 500 and the NASDAQ. This week I'll give you SPY and QQQ suggestions along with three stocks. Also this week I give a Bitcoin Analysis due the the sell off caused by SVP Financial being shut down by regulators. Finally I'll give one of the stocks I'm dollar cost averaging into based on it's fundamentals.

S&P 500 - SPY is showing bearish sentiment however, the 50 day simple moving average (SMA) is still above the 200 day. Will it stay above for much longer? I don't know but the price closed below the 200 day at Friday's close. We also saw the market breakdown on high volume. Which is why I'm now bearish on the overall market. This Tuesday on February 14th we have the Consumer Price Index (CPI) reading coming in. I'm still expecting we come in hotter than expected and we get a significant drop but that is speculation. With the fall of SVP Financial, which was the 16th largest bank in the country I no longer believe the trend continues up. More on SVP in the Bitcoin section.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA below he 20 SMA about thirteen days ago. However our 20 SMA is still above the 200 but with the market possible turning back bearish we might want wait for a signal after the publishing of the CPI. If price stays below the 20 SMA after the publishing of the CPI I'll be looking for a rally. When the 5 period RSI goes back to 50 or a little above I'll be looking to buy put options.

Looking at the NASDAQ 100 - QQQ had a golden cross this week with the 50 SMA crossing the 200 SMA. However just like the SPY the 5 SMA crossed below the 20 SMA thirteen days ago. Just like the SPY I'm considering put options if the 5 period RSI rallies back above 50.

Bull Bear Momentum System (BBMS) Trades

When markets are in bearish we look for stocks in a downtrend and we adjust our charts with the BBMS parameters. Sometimes a short term uptrend can occur so we wait until we get a bearish cross of the 5 SMA below the 20 SMA. My top three are below: AMZN, MMM, and NFLX

AMZN - (Bearish) It's possible RSI could get back to 50. Look for a put options if we get a rally back up after the publish of CPI. Make sure you have 80% intrinsic value with 7-14 days in time.

MMM - (Bearish) has a lot of momentum to the downside. The 5 SMA has crossed and stayed below the 20 SMA for several weeks now. Wait for another rally with the RSI getting above 50. Pick the option with 80% intrinsic value with 7-14 days out in time.

NFLX - (Bearish) wait until RSI comes back below 50. The 5 SMA has crossed below 20 SMA and stayed there for 13 days. Pick the call option with 80% intrinsic value with 7-14 days in time.

If you haven't read the book The Bull Bear Momentum System please take the time to do so and watch the videos for better understanding. The link is at the bottom of the email.

Bitcoin

With the fall of SVP Financial the crypto markets sold off. With Bitcoin I just keep it simple. We are in a bear market so I just dollar cost average and add to my position when I make profits from trading. The last bear market Bitcoin went down to $3300 and in the bull market after the block halving we saw it run to $64k. The current bottom for Bitcoin is about $15,500. Could it go lower? Maybe but now I believe is the time to add to your position before the halving in 2024. More fallout will come if regulators can't resolve the fallout from SVB Financial before the market opens on Monday. Don't let this event take away what will happen with Bitcoin over the next 3-5 years. Remember just buy and hold for now. I'm estimating we can see 10x off of the 15,500. That's when it will be time to take profits.

Fundamental Analysis Stock Pick

PayPal $PYPL is a stock to dollar cost average in now I believe. In this case I'm not trying to time the market. I want to add to my position over the year as long as it stays below its intrinsic value. Now you might be wondering how I got to its intrinsic value. What I do is I check it's earning over the past ten years. I like to look at the 1yr, 3yr, 5yr and 10yr for Revenue, Return on Invested Capital (ROIC), Book Value Per Share (BVPS), Earning Per Share (EPS), and Free Cash Flow (FCF). If these levels are above 10% its a go to calculate its intrinsic value which I have labeled in the picture below as the sticker price. For the newsletter I'm not going to get into how I calculate these number. I'll do a article on my upcoming blog. If you are curious, read the book Rule #1 by Phil Town. Once I arrive at the intrinsic value/sticker price I divide it in half and that becomes my margin of safety price which is my buy price. I then start to dollar cost average in when it is near or below that number. The plan is to hold the positions over the next ten years. See the picture below for reference.

Thank you for reading

Brian - The Bull Bear Investor