History and Background

Meaning of Short, Intermediate, and Long Term Time Frames

I subscribe to your Daily Edition.  My question concerns short term, intermediate, and long term.  When you are long term bearish, does that indicate we are in a bear market?  Or may this allude to a few weeks correction?  In other words, how long is long term from the standpoint of your Daily Edition?

Everyone has different definitions for these things, and so you are wise to ask for clarification. We view these different length opinions not so much as a forecast which extends out a certain distance into the future, but rather as being descriptive of certain trading styles that different people might choose to employ.

A short term trader, in our view, would be someone looking to trade every few days.  Some people have an even shorter time frame than that, but that style is not something we can address in a once daily publication.  Intermediate term refers to trading every few weeks, and long term is a few months.  Interestingly, these are the same definitions that Charles Dow originally put forth over 100 years ago.  

For our long term current opinion, we are basically trying to trade the 9-month (AKA 40-week) cycle.  This can lead to an especially confusing interpretation of what we are saying.  Someone with a long term trading style would want to wait until the bottom is in before buying to trade an impending rally.  So we might fully believe that there will be a robust rally out of the next 40-week cycle low that would take the averages to higher highs, but we could still remain long term bearish until we can perceive that this botton has arrived.  

I hope that helps to clear this up.  Thanks for posing the good question.