According to warnings from the trading departments of Barclays and Goldman Sachs, the sell-off in US stocks last Friday may not have been an abnormal volatility. Goldman Sachs traders Lee Coppersmith and others pointed out in a report that crowded positions, narrow market breadth, and high interest rate expectations increase the risk of a pullback. Alexander Altmann, the head of strategy at Barclays, stated that volatility controlled funds may need to reduce their US stock allocation by approximately 14 percentage points, marking the largest single day risk-free operation since February 6th.
