Bull Bear Investor Newsletter 4-24-2023

Thank you for being a reader of 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 seventh straight week. Finally I'll discuss PayPal as the stock I'm dollar cost averaging into based on it fundamentals for the seventh time as well.

S&P 500 - SPY is still showing bullish sentiment based on the simple moving averages and technical analysis. 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. This past week we had a default by a major commercial real estate investment firm Brookfield Properties (link to the article) that defaulted on its commercial real estate portfolio in DC of $161.4 million. Brookfield recently in February defaulted on a $784 million loan on its LA portfolio. Due to the hiking of interests rates by the Fed this is causing the payments on these loans to increase because of the floating rates. This week is the start of earnings season and some single stocks can take the SPY higher depending on beating earning expectations. I'm still taking my trades with caution because I don't believe this banking crisis is over. We do have economic reports coming this week with the Case Shiller home price index report coming out on Tuesday along with New Home sales and Consumer Confidence. Retail and wholesale inventories come out on Wednesday followed by Pending Home sales on Thursday. I do not believe these reports will have a big effect on the market due to a big earnings week. Last week's Philly Manufacturing Index dropping to -24.5 is showing weakness 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 20 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. What I'll be looking for the first pullback with the 5 period RSI dropping at or below 50 to buy call options. Keep in mind this is a big earnings week and missing expatiations could cause a sell off.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about 21 days ago. QQQ looks like it could see more of a pullback especially with big names like Microsoft reporting earnings this week. I will not be trading the QQQ this week due to big tech earnings

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. This week is very difficult to find stocks because we have a big number of earnings reports coming out. So I only have two instead of three and both earning reports have already been reported. See my top two below: MS and HCA. .

MS - (Bullish) Morgan Stanley just had a bullish cross of the 5 SMA crossing the 20 SMA about 5 trading days ago. I'll be looking for the first pullback with 5 period RSI dropping below 50 to buy call options.

HCA - (Bullish) HCA has a lot of momentum to the upside. The 5 SMA crossed and stayed above the 20 SMA for 24 days now. I'll be looking for the RSI to pullback and drop below 50 to consider 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 is still showing price support around $27k. I stated last week that we could get a pullback to the 50 SMA. Look at the price now and you can see that it is very close. Strong support is at $27k and now the 50 SMA is roughly $27k. As I stated previously I'm looking to buy the pullbacks to the 20 SMA and the 50 SMA. I have added to my position on both pullbacks. The block halving for Bitcoin in next year in 2024 and adding to a position now you will be early in the trend. As I have stated in the previous weeks less supply will be on mined in the markets once the halving occurs. 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 didn't come back into my margin of safety (MOS) price of $72.44 this week. It closed at $74.18 which is above our MOS. 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. In about three weeks on May 8th PayPal will report earnings and price has been going sideways. I expect a earning run could happen and price could go up big after the report. Check the chart because our MOS price is becoming a strong support level as I reported last week. 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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