Bull Bear Investor Newsletter 7-17-2023

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 month 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 will not have a major impact on the market this week. On Monday we have the Empire State manufacturing survey. On Tuesday we get the Retail sales along with the Homebuilder confidence index. On Wednesday we get the Housing Starts report and on Thursday we get the Philly Fed manufacturing survey, Existing Home Sales, and US Leading Economic Indicators report. On Friday there are no reports.

Putting the Bull Bear Momentum System parameters over the SPY we get a cross of the 5 SMA above the 20 SMA about forty-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 an uptrend. The cross we got along with the price action is very bullish. If RSI can drop back to 50 or below I’ll consider buying call options.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about fifty-two trading days ago. RSI is currently above 70, and I’m going to see if it can drop to 50 or below where 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: ADBE, CRM, and AMZN.

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.

ADBE - (Bullish) Adobe had the 5 SMA cross above the 20 SMA about thirty-eight trading days ago. If RSI can drop back to 50 or below I’ll consider buying call options.

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

AMZN (Bullish) Amazon is showing bullish sentiment with the 5 SMA crossing the 20 SMA ninety 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 week as it did the previous 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 saw movement this week were MakerDao (MKR), AAVE, and Compound (COMP). I’m still anticipating MKR, AAVE, and COMP will be listed in the future because these are like the blue chip DEFI coins. 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 price move up and move back down. Litecoin’s halving is roughly 16 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. Over the next few weeks we could see move and sell off. Once the sell off happens I’ll just dollar cost average as normal going into the next crypto bull cycle.

Fundamental Analysis Stock Pick

This week PayPal (PYPL) get to our (MOS) price of $72.44 this week before selling back down by a little. It closed at $72.10 which is near 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 a month 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. Institution seem to be slowly adding PYPL back to their portfolios. This week we saw the price move aggressively up. 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. Give it a read when you get a moment.

Thank you for reading

Brian - The Bull Bear Investor

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