Oversold Stocks Piling Up

Although the S&P 500 is down less than 5% from its bull mar­ket highs, the per­cent­age of stocks that are over­sold is really start­ing to pile up.  Using a bound­ary of one stan­dard devi­a­tion above or below the 50-day mov­ing aver­age as the thresh­old for being over­bought or over­sold, 49.4% of the stocks in the S&P 500 are now con­sid­ered over­sold, while just 19.0% of the stocks in the index are over­bought.  The chart below shows the daily per­cent­age of S&P 500 stocks that are over­bought and over­sold.  As shown in the chart, the cur­rent level of 49.4% is the high­est per­cent­age of over­sold stocks in the index since 10/3/11.