Bull Bear Investor Newsletter 5-15-2023

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 a tenth straight week. Finally I'll discuss PayPal as the stock I'm dollar cost averaging into based on it fundamentals for the tenth time as well.

S&P 500 - SPY is still showing bullish sentiment based on the simple moving averages (SMA) and technical analysis. Inflation came in at 4.9% percent below expectations of 5% but the markets stayed flat. The regional banking crisis that I've been talking about for weeks is still playing out and we have two more banks that were seeking sale but nothing has happened. PacWest Bank (PACW) and Western Alliance (WAL) are the latest to be having trouble as I stated last week. Neither bank has gone into FDIC receivership like First Republic the from two weeks ago. We saw the market kind of flat this past week as it waited on the inflation numbers and somewhat remained that way when the reports came out. I'm still taking my trades with caution because I don't believe this banking crisis is over. We do have major economic reports coming this week but I don't think will have a major impact on the market. What I do believe will have a major impact on the market is that almost every day next week their will be someone speaking from the Federal Reserve. On Tuesday we have Retail Sales report along with the Home Builder confidence report. On Wednesday we have Housing Starts and Building Permits reports. Lastly on Thursday we have the Philly Fed factory survey, Existing Home Sales, and Leading Economic Indicators report.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA above the 20 SMA about two 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 above a few days before we go bullish. If it plays out this way I'll wait for a bullish confirmation to enter call options.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about nine trading days ago. QQQ looks like its RSI is headed back to 50. If it pulls back I'll be considering 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: AMD, GOOG, and MSFT.

AMD - (Bullish) AMD had the 5 SMA cross above the 20 SMA about three trading days ago. RSI is currently above 70. I'll be waiting for the RSI to drop back to 50 or below to consider call options.

GOOG (Bullish) GOOG has strong momentum to the upside. The 5 SMA crossed the 20 SMA about three trading days ago. The RSI is at 90 so I will be watching and waiting on a drop to 50 or below before I enter call options.

MSFT (Bullish) Microsoft had the 5 SMA cross the 20 SMA about 11 days ago. RSI is pulling back near 50. If it pulls back to 50 or below I'll be considering 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 broke below price support of $27k and the 100 SMA looks to be where it caught support previously. I stated last week that we could get a pullback to the 50 SMA but I did not expect a drop below. This past week we have seen Bitcoin bounce off of the 100 SMA showing strong support. As I stated previously I'm looking to buy the pullbacks to the 20 SMA and the 50 SMA but getting a pullback to the 100 SMA is a solid place to buy. 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. Just keep dollar cost averaging.

Fundamental Analysis Stock Pick

This week PayPal (PYPL) reported earnings and dropped well below our (MOS) price of $72.44 this week. This is not unusual when you are buying when a company that has a good balance sheet in a market that has corrected. It closed at $61.69 which is well below our MOS on Friday. My analysis has a intrinsic value of $145 but Brett Horn of Moringstar has a value $135, see report here. Also in the CNBC article Brett Horn is mentioned for his analysis and the sell off is somewhat explained. Now that earnings is out of the way we can dollar cost average as normal at lower prices. Do not let this sell off scare you over time institutions will buy it up. I did not expect a sell off I must say but analysis are seeing increasing competition in the digital payments space. While there is more competition PayPal is still used by a lot of businesses in the eCommerce space. I'm still drafting my article on how I get these numbers for my upcoming blog which I will have done soon. 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

50