People are often confused when I express my market opinion. Most people, who don't spend as much time on market timing as I do, are either bullish or bearish. I have multiple time frames in my mind and might have a different opinion on different time frames. For instance, I might be bullish looking a month out but think that in the very short term the market is extended and could go down for a few days.
There are four main time frames I tend to think in. They include very short term (1-2 days), short term (5-10 days), intermediate term (4-12 weeks) & long term (years). I try to base most of my activity on the short and intermediate term, while keeping the other two in the back of mind.
The best trades happen when most of these time frames are lining up. On Monday, all time frames but the long term were at extremes. The result has been a very large rally in a three day period. However, by this morning the market became extended in the very short term and this was a negative. The short term is still supportive but less so than Monday. The intermediate term is supportive as the market has been up for three days after going down for two months.
Somebody asked me my market opinion this morning. I said I thought we were extended in the very short term. The response I received was "Already?". I realized at that point that there might be some confusion. I hope this adds clarity.