Bull Bear Investor Newsletter 7-10-2023

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 once again along with a Litecoin halving update. Finally I'll discuss PayPal as the stock I'm dollar cost averaging into based on its fundamentals as well.

S&P 500 - SPY is still showing bullish sentiment based on the simple moving averages (SMA) and technical analysis. A few weeks ago the SPY got above 20% off of its bear market lows officially putting it in a bull market. As of now I’m still not a bull but more like a cautious bull. The regional banking crisis that I've been talking about for the past few months is still playing out in the background and we still don't know what to expect next. I'm still taking my trades with caution because I don't believe this banking crisis is over. It has been very quiet but I do believe we will see more banks having trouble later this year. We do have major economic reports coming this week that I do believe could have a major impact on the market this week. On Monday we have multiple speakers from the Federal Reserve speaking along with the Consumer Credit Report. On Wednesday we get the Consumer Price Index (CPI) that will give the current inflation number and on Thursday we get the Producer Price Index (PPI) that will give us the inflation number to produce products and services. Finally on Friday we get the Consumer Sentiment report.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA above the 20 SMA about thirty-six 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 an uptrend. The cross we got along with the price action is very bullish. RSI is currently below 50 which is a buy signal according to system rules. I’m going to see how it opens on Monday. If we head back up by the close I’ll consider buying call options.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about forty-seven trading days ago. RSI is currently below 50 which is a buy signal according to system rules. I’m going to see how it opens on Monday. If we head back up by the close I’ll consider buying call options.

Bull Bear Momentum System (BBMS) Trades

When markets are in a bullish or bearish trend we look for stocks following either trend and we adjust our charts with the BBMS parameters. See my top three below: CAT, FDX, and NTAP.

Note: In the future I’ll be posting setups with a high probability for profit with price patterns. I’ll add an ebook and video to show I analyze these trades. For now I’ll keep giving the BBMS picks until it is complete.

CAT - (Bullish) Caterpillar had the 5 SMA cross above the 20 SMA about twenty-three trading days ago. RSI is rising above 50 from dropping below and if it opens positive I’ll consider buying call options.

FDX (Bullish) FedEx has strong momentum to the upside from its breakout this past week. The 5 SMA crossed the 20 SMA about sixteen trading days ago. If RSI drops to 50 or below I'll be considering call options.

NTAP (Bullish) NetApp is showing bullish sentiment with the 5 SMA crossing the 20 SMA thirty-six trading days ago. RSI is currently above 70 and if it drops to 50 or below I’ll be looking 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’s price stayed around $30k and traded flat this past week. I still believe that we are seeing the gains of Bitcoin made by these institutions pouring into a few of the altcoins. This past week we saw two major altcoins and a few Decentralized Finance (DEFI) coins that pulled back while the rest of the market's coins stayed flat. The coins that had pullbacks were Bitcoin Cash (BCH), Litecoin (LTC), MakerDao (MKR), AAVE, and Compound (COMP). BCH and LTC are on the new exchange and I anticipate MKR, AAVE, and COMP will be listed in the future. What we saw here was some profit taking back into Bitcoin. As I stated previously I'm looking to buy the pullbacks on Bitcoin to the 20 SMA and the 50 SMA. Currently Bitcoin is sitting on its 20 SMA. While it is possible it could pull back to its 50 SMA I believe the price can go to levels we have never seen before. 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 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. Here in the not so distant future I’ll show you how I leverage trade Bitcoin but for now just keep dollar cost averaging.

Litecoin Price Movement - Upcoming Halving

In my newsletter dated May 22 I wrote about the upcoming Litecoin Halving and how the price bottomed at $55 this cycle. This week we saw a pullback. Litecoin’s halving is roughly 24 days away with an estimated date of August 2nd. Each week I discussed Bitcoin’s halving but actually have explained what happens during a halving. The miners block rewards are reduced to half causing the current supply to come in circulation slower. With this new demand with institutional money coming in and less supply on the market price will move up. Last cycle price peaked before the halving but this one seems to be playing out differently. This time it looks like the closer we get the halving is when we will see more price movement.

Fundamental Analysis Stock Pick

This week PayPal (PYPL) continued to trade further below our (MOS) price of $72.44 this week. It closed at $66.79 which is well below our MOS on Friday. From the looks of price action this stock looks like it's in the early stages of accumulation after the last earnings capitulation. As I stated last week roughly three weeks ago PayPal sold off most of its Buy Now Pay Later (BNPL) business. An article was published in Morningstar behind a paywall but some details were made public. PayPal will add cash to their balance sheet and has put aside $5 billion for stock repurchases. Bret Horn of Morning star has an intrinsic value of $135 while my calculations gave me roughly $145. This week we saw the price get above the 50 day SMA and pull back to it. If price can hold and get back to its price at last earnings we should see a recovery and profit at the end of the year. I've been stating in the previous newsletters I would write an article on how I get these numbers. The article is Buying Stocks with a Margin of Safety.

Thank you for reading

Brian - The Bull Bear Investor

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