Goldman Sachs traders say the landscape of U.S. stocks has become clearer as we enter December.

According to Golden Finance, Goldman Sachs' trading division stated that while the S&P 500 index may end November roughly flat, the path ahead has become noticeably clearer as volatility eases, market breadth improves, and trend-following strategies shift to the buy side. Multiple indicators show that as we enter December, the market is stabilizing. Goldman Sachs' Lee Coppersmith noted in a report to clients that the five-day moving average of the number of S&P index constituents that rose minus those that fell had dropped to -150 earlier this month, indicating “considerable damage beneath the surface.” However, just before Thanksgiving, that indicator rebounded back to around +150. “This is a huge shift—market participation is broader, not just a narrow squeeze, and it further indicates that the market has released a significant amount of pressure in mid-November,” he added. Goldman Sachs' volatility panic index conveys a similar message. The index is currently around 5, slightly above the average level of the past three years, and well below the highs seen in early November. The so-called systematic strategy positions have also been reset. Goldman Sachs traders estimate that the sell-off related to the S&P 500 index over the past month was about $16 billion, stating that these trades drove the earlier decline in the stock market. After this round of de-risking has largely been absorbed by the market, the bank's baseline expectation for next month has turned to net buying, with a scale of about $4.7 billion. “This means that we are entering December with a cleaner starting point compared to a few weeks ago,” Coppersmith wrote.