Bull Bear Investor Newsletter 7-3-2023

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. Which 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 Tuesday the market will be closed due the the fourth of July holiday. On Wednesday we have the ADP unemployment report and the release of the Fed meeting minutes. On Thursday we we have the US trade deficit report and Job Openings report. Finally on Friday we get the US unemployment 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-one 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 cross we got along with the price action is very bullish. RSI is currently above and I’m looking to buy call options if it drops to 50 or below.

Looking at the NASDAQ 100 - QQQ had the 5 SMA cross above the 20 SMA about forty-two trading days ago. If the RSI can drop back to 50 or below again I'll be buying 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 three below: AAPL, V, and MCD.

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

AAPL - (Bullish) Apple had the 5 SMA cross above the 20 SMA about seventy-four trading days ago. RSI is above 70 and if it drops to 50 or below I'll be considering call options.

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

MCD (Bullish) McDonalds is showing bullish sentiment with the 5 SMA crossing the 20 SMA nine 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 price stayed around $30k from the breakout of the previous week. This breakout was in response to the news that Blackrock had filed for a spot ETF with the SEC and Charles Schwab, Fidelity, and Citadel announcing they will be creating a exchange where you can purchase Bitcoin and a few altcoin with your brokerage account. What I believe is happening is that you are seeing the gains of Bitcoin made by these institutions are pouring into a few of the altcoins. This past week we saw two major altcoins and a few Decentralized Finance (DEFI) coins that had big moves while the rest of the markets coins stayed flat. The coins that had big movement 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. As I stated previously I'm looking to buy the pullbacks on Bitcoin to the 20 SMA and the 50 SMA. I believe 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 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. Here in the not so distant future I’ll show you how I leverage trade Bitcoin but for now jus t keep dollar cost averaging.

Litecoin Price Movement - Upcoming Halving

In my newsletter dated on the May 22 I wrote about the upcoming Litecoin Halving and how price bottomed at $55 this cycle. The last cycle we saw price bottom $22 and run up to roughly $125 giving a 5.6x return. With the recent news that Schwab/Fidelity/Citadel are creating a crypto exchange with Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC) this just shows liquidity coming into the crypto markets. Litecoin’s halving is roughly 30 days away with a 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.

Fundamental Analysis Stock Pick

This week PayPal (PYPL) continued to trade further below our (MOS) price of $72.44 this week. It closed at $66.73 which is well below our MOS on Friday. From the looks of price action this stock look like its in the early stages of accumulation after the last earnings capitulation. Maybe two weeks ago PayPal sold off some most of its Buy Now Pay Later (BNPL) business. A article was published in Morningstar behind a pay wall but some details were made public. PayPal will add cash to their balance sheet and has put aside $5 billion for stock repurchases. This current week we saw price get back to its 50 day SMA and stay around there. 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'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

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