Ask a CFI: How should a pilot respond to a traffic advisory from ATC?
There are only two official responses to a traffic advisory issued by ATC: 1) “Traffic in sight” if the pilot sees the traffic or 2) “Negative contact” if the pilot does not have the traffic in sight. However, Flight Training Central spoke to ATC personnel on the subject who confirm that the phrase “Looking for traffic” is often used informally and is generally understood and accepted.