Bull Bear Investor Newsletter 5-1-2023

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 eighty 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 that I've been mentioning since Silicon Valley Bank went down has yet another bank that has collapsed which is First Republic Bank. First Republic has been losing depositors like most regional banks since the start of the regional banking crisis and now is going into FDIC receivership. This caused a even bigger problem because most of the loans issued by them were to wealthy clients that took out interest only loans as explained in this Business Insider article. While this had no effect on the overall market we need to keep an eye on this sector because it could have some bad outcomes in the future. 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 that could have a effect on the market with the Job Openings report on Tuesday. On Wednesday we have the ADP Unemployment report along with the Fed's interest rate statement followed by the Fed Chair's press conference. I expect the Fed to raise rates by 25 basis points as we continue the inflation fight. On Friday we have the Department of Labor Unemployment report.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA below the 20 SMA about 3 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. The way this cross below looks like it will be short lived so lets wait to see if it can stay below 6-8 days before we go bearish. What I'm anticipating is that after the Fed speaks the 5 SMA will be back above the 20 SMA. If it plays out this way I'll wait for a pullback with the RSI at 50 or below and look to buy call options.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross below the 20 SMA about 3 days ago. Like the SPY the 5 SMA on QQQ looks to be headed back above the 20 SMA. I will treat the trade just like the SPY and look for a pullback on the RSI to 50 or below to buy call options.

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. See my top two below: MS, META, and MU

MS - (Bullish) Morgan Stanley just had a bullish cross of the 5 SMA crossing the 20 SMA about 9 trading days ago. Last week we got a drop below 50 on the RSI as I was waiting on. You can still enter this trade if it opens positive on Monday.

META (Bullish) META has a lot of momentum to the upside. The 5 SMA crossed back above the 20 SMA after their earning report. I'll be looking for the RSI to pullback and drop below 50 to consider call options.

MU (Bullish) had a bullish cross on Friday. I'll be waiting on a pullback of the RSI at 50 or below to buy 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. Last week we saw Bitcoin bounce off of the 50 SMA and push back up to $29k. As I stated previously I'm looking to buy the pullbacks to the 20 SMA and the 50 SMA. I believe it is still ok to add because Bitcoin just got back above the 20 SMA. The block halving for Bitcoin is one year away 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 did come back into my margin of safety (MOS) price of $72.44 this week. I did have a buy order set to add to my position as it hit the MOS price. It closed at $76.00 which is above our MOS on Friday. Nothing has really changed here as 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 a week 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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