Technicals & Fundamentals

Whenever traders start commenting on fundamentals when they are in a losing position the next step is usually a blowout. It's just a bad omen. There many quantitative funds that look at macro stuff but a technical system does not trade on fundamentals. When a trader starts commenting frequently on fundamentals "while they are in a losing trade" it's usually because the system has failed them and now they are turning to religion (fundamentals) so to speak. Many traders will comment on fundamentals when they are in a "winning" trade. Usually this is done to keep them in the trade and extend their winners because we all have a tendency to cut our winners short.  Large funds that commit to technicals do not "suddenly" start introducing fundamentals while they are in a trade. This is usually decided upon from the beginning. When guys get desperate they start yelling at the rain. There is no shortage of guys trying to defend their short positions in this bull market with fundamental commentary. 

Fundamental traders stay in trades as long as the fundamentals justify their trades. A technical trader trades a model and that model has inputs that create values for you to trade on. At some point those values are invalidated and action must be taken. You can't create a model that trades on data and suddenly use fundamentals to justify losses. There has to be a consistency there. One of the worst markets you can have is one that is technically strong and fundamentally weak. And vice versa one that is technically weak but fundamentally strong. Because the technicals will blow out the trader before the fundamentals can save them. To quote two of the best traders in the world, Bruce Kovner and George Soros, they only trade their fundamental views when the technicals agree with the fundamentals. If there is a dichotomy then they will not make the trade.