Bull Bear Investor Newsletter 4-10-2023

Thank you for being subscribed to the Bull Bear Investor Newsletter. This is where I put together an analysis on the S&P 500 and the NASDAQ. This week I'll be giving you SPY and QQQ suggestions along with three stocks. Also this week I'll give a Bitcoin Analysis for fifth straight week. Finally I'll discuss PayPal as the stock I'm dollar cost averaging into based on it fundamentals for the fifth time as well.

S&P 500 - SPY is showing bullish sentiment based on the simple moving averages. The regional banking crisis is still playing out in the background along with rumors that the commercial real estate industry could be next with trouble. The market stayed flat as institutions seemed uncertain on S&P 500 stocks. I'm still taking my trades with caution because I don't believe this banking crisis is over. We do have possible market moving economic reports coming this week with the Consumer Price Index (CPI) report coming out on Wednesday and the Producer Price Index (PPI) report coming out on the following day. Also this past week we saw Gold prices top $2,048 per ounce. This is usually a warning sign that something is wrong in the economy. Proceed with caution on trades with companies that will be effected by these reports.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA above the 20 SMA about 9 trading days ago. As stated in the rules 5 SMA crossing the 20 SMA is our first warning sign. Notice how the 5 SMA, 20 SMA, and price are above the 200 SMA. Probabilities say that price will continue in a uptrend. Now we are going to see if we get a pullback of the 5 period RSI below 50. We will take precautions to make sure we are not trading before the CPI and PPI reports come out. What I'll be looking for the first pullback with the 5 period RSI dropping at or below 50 to buy call options. This may not happen until after both reports are published.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about 16 days ago. Just like the SPY I'll be looking for a pullback with the 5 period RSI to drop below 50 to look for call options. I'll be taking the same approach as I am with the SPY, waiting on both the CPI and PPI.

Bull Bear Momentum System (BBMS) Trades

When markets are in bullish or bearish trend we look for stocks following either trend and we adjust our charts with the BBMS parameters. Same as last week my top three are below: MU, CRM, and GOOG.

MU - (Bullish) Micron broke out after earnings and had strong momentum to the upside. The 5 period RSI dropped all the way to 30 after breakout and pullback. On Friday's close we saw a morning star candlestick signal. Enter a trade if it opens positive on Monday morning. Make sure you have 7-14 days in time with 80% intrinsic value. I'd look to be out of this trade near the close on Tuesday before the reports come out.

CRM - (Bullish) Salesforce has a lot of momentum to the upside. The 5 SMA has crossed and stayed above the 20 SMA for 27 days now. Last week we got a pullback with the RSI dropping below 50. On Friday's close we got a hammer candlestick signal. If we open positive on Monday I'll be looking to buy call options. I will only hold until near the close of the market on Tuesday before the economic reports come out.

GOOG - (Bullish) still has momentum to the upside. Last week as predicted the RSI pulled back below 50 and if you entered this trade you were profitable. If the RSI pulls back below 50 I'll be looking to call options.

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

Bitcoin it still showing price support around $27k. Now that price has pulled back to the 20 SMA I'm adding to my position. I do know that it is possible that it could pullback to the 50 SMA around $25k. As I stated previously I'm looking to buy the pullbacks to the 20 SMA and the 50 SMA. I believe what is driving this price action is inflation being above 6% for at least two years now. Over the last week Gold prices broke above $2,000 along with Silver prices breaking above $25. When this happens this means the smart money knows something in the economy is wrong. Capital goes to where it is safe and Bitcoin as well as Litecoin seem to be getting treated like digital gold and silver. The block halving for Bitcoin in next year in 2024. This means less supply will be on mined in the markets. Combined with inflation we could see a Bitcoin price that could 20x off of its bottom price of $15,500. It seems impossible but we are talking $310k Bitcoin price.

Fundamental Analysis Stock Pick

This week $PYPL came back into my margin of safety price of $72.44 again. It closed at $74.96 which is above our margin of safety. I keep discussing this stock even though nothing has changed because this is how wealth is built in the stock market. The numbers say that this stock is on sale. Even when you use Ben Graham's calculation the numbers are very similar. It is safe to still buy at the current price because you are still in the ball park of the MOS price. You are also well below the intrinsic value of $145 roughly. I'm still drafting my article on how I get these numbers for my upcoming blog. As I stated in the previous weeks you can read the book Rule #1 by Phil Town to get a understanding of these numbers.

Thank you for reading

Brian - The Bull Bear Investor

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