Goldman Sachs Tony Pasquariello, head of hedge fund strategy, noted in his latest market commentary that while U.S. stock indices appeared calm in July (with the S&P 500 trading within a range of just 3.5%), the underlying crowded trades had suffered a severe liquidation, particularly after high-frequency trading experienced a parabolic rise.He tends to believe that this frenzy has cooled off, and the most crowded, easiest, and most leveragable trades have been forced to cool down. For example, global tech exposure experienced its largest sell-off in more than five years, and assets under management in leveraged South Korean stock ETFs fell from a June high of $53 billion to $15 billion. Goldman Sachs believes that the outlook for the U.S. stock market remains favorable, with a strong economy and robust earnings growth, but the risk-reward ratio is no longer attractive, and the upside potential for global stocks has weakened. The bull market hasn’t been ruled out, but the next phase won’t be one of “buy and hold”; short-term volatility is set to increase.