A Goldman Sachs research report indicates that the US stock market's deleveraging is nearing its end and expects range-bound volatility in August.

According to Trend Research, a Goldman Sachs research report on July 29 pointed out that the global account total leverage ratio is at the 93rd percentile based on the past five years, and hedge funds’ long-short ratio has dropped from 5.7x to 3.2x, with over 90% deleveraging progress. In July, net inflows into US stock funds reached $34 billion. The S&P 500 fell below the short-term trigger level of 7,453 points; a further decline will trigger concentrated CTA selling. Goldman Sachs estimates that systematic strategies are holding about $19.63 billion in US equity long positions, and CTA positions are at the 44th percentile. Goldman Sachs expects US stocks to mainly fluctuate within a range in August. Buybacks are expected to support demand in August, with about 31% of S&P 500 constituents in the buyback window, and over 90% of companies expected to exit the blackout period by mid-August. Seasonal outflows, quantitative selling, and conservative institutional positions are limiting the upside. Goldman Sachs recommends counter-cyclical diversification strategies and IWM put options as hedging tools.