Larry, I very much enjoy your newsletter. I have only one suggestion.
When you discuss what you think may be happening with the SP500, especially with the COT methods, could you put these in perspective by labeling them as short, medium and long term (1-3 weeks, 2-3 months, 4+ months or wherever you draw those lines)?
I sometimes get confused as to the time scale you are discussing.
I have seen other newsletters that will plug in a quick summary like this:
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Outlook:
Short Term (1-3 weeks) SP500 may try to rise to last high this year
Medium Term (2-3 months) After above rally, market is likely to test lows this year.
Long Term (4+ months) Market looks weak and may go down to 1999 lows.
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...Or whatever
And, yes, I do understand that these are only opinions.
Thank you so much for your input. I really do appreciate the feedback. When I write about the stock market I discuss what an index, usually the S&P, is doing in relation to its 50-day and 200-day moving average. The 50-day moving average is a representation of the intermediate trend. The 200-day moving average is a representation of the long-term trend. I also discuss where the market is in relation to the RSI. You may think of it as an indication of the short-term trend.
All I’m trying to do with these discussions is to point out possible support and resistance areas and overbought and oversold levels. I’m not trying to make a prediction. Every once in a while I’ll write what I think is likely to happen. But when I do that, it’s usually just a gut feeling. My crystal ball is not any better or any worse than anybody else’s.
I’ve often debated with myself if it is even worthwhile for me to write about the market. Since I’m trying to get people to move to a more mechanical form of investing, I sometimes wonder if my writing about the market just confuses the issue. The only reason I do it is I’ve always found it helpful for my own investing to have a very general outline of the kind of market environment I think we’re in.
I understand that it would be convenient to be able to glance at the report and look for very specific time frames, like “1-3 weeks,” “2-3 months,” “4+ months,” etc. But since I don’t have any idea what is going to happen in specific time frames (I don’t even think in those terms), and since I don’t think anybody else has the foggiest notion either, it would be disingenuous for me to pretend that my opinion about specific time frames would be the least bit useful.
As for as the COT is concerned, I certainly wouldn’t be able to forecast time frames since I have no idea what the COT report is going to say from week to week.
But I’ll give your suggestion some more thought, Clint. The report is always evolving. The current one looks very little like the original one. So you never know what changes I might make in the future. Thanks again.