Bounce
A Bounce Without “Oomph”
One would think that one of the most explosive market rallies of all time would trip-off all the traditional “breadth thrust” signals, or maybe even invent a few of its own. Sorry, no luck.
2017 Was A Good Year For Playing The Bounce
The last two months of 2017 produced great results for the Bounce strategy.
Playing The Bounce: Does The November List Bounce?
We reconstituted the November and October “Bounce” screens back to 1986 and compared their average performance versus the “non-bounce” companies. Compared with the October list, the November list shows a much weaker bounce effect.
Playing The Bounce: The October List
Starting back in the early 1990s, The Leuthold Group began constructing and sending out an annual list of stocks that appeared to have been the subject of unusual selling pressure late in the year.
Year-End Rebound?
We reviewed 100 years of evidence for the Dow Jones Industrials Average and found no compelling evidence for a “bounce” effect. Contrary to expectations, fourth quarter Dow performance has (on average) been stronger when the index has already booked a gain through the first nine months.
A Good Year To Play The Bounce?
Our research shows that the best years to “Play The Bounce” are generally ones in which the stock market is heading down into the fourth quarter. We won’t rule out an allocation to the Bounce strategy in the weeks ahead.
Playing The Bounce?
With almost 70% of NYSE stocks trading below their 30-week moving averages, there’s plenty to choose from for investors looking to “Play The Bounce” in YTD underperformers. The traditional “Bounce” season extends from October through January; with the MTI having just turned negative, though, we’d advise against putting this strategy to work immediately. Here are a couple of additional observations gleaned from more than 25 years of tracking this strategy:
A Forgettable “Bounce” Season
The last few innings of a cyclical bull market generally favor trend or momentum-oriented strategies, rather than mean-reverting ones like “Playing The Bounce."
January Anomalies Revisited
The January Small Cap bounce effect ain’t what it used to be, but extrapolating the month’s market action for the next eleven months is a “less bad” idea than any other time of the year.
Playing The Bounce - With A Twist
The historical batting average of this strategy has been decent, with gains in 9 of 18 years along with “excess” returns over the S&P 500 in 10 of 18 years. The best Bounce seasons have occurred when the market was either down for the year through September, or up only modestly.
Playing The Bounce: November Screen
Our annual screen presents the candidates with the largest declines and smallest rebounds, thus far, in each market cap segment.
Playing The Bounce: Last Screen Of The Season & Historical Results
The last screen of 2011 is presented and historical November Bounce screen results are detailed.
Playing The Bounce: New Methodology And Backtesting
A new screening methodology for Leuthold’s traditional “Playing The Bounce” screen is presented and examined.
Playing The Bounce 2010—Final Scorecard
As we expected, it was not a memorable “Playing The Bounce” year.
Playing The Bounce 2010—Final Update
As we expected, it was not a very good “Playing The Bounce” year. Many fund managers still had substantial tax loss carry forwards which they used to offset 2010 gains.
Playing The Bounce Update
It does not look like a very good “Playing The Bounce” year. Many fund managers still have substantial tax loss carry forwards they can use to offset this year’s gains.
Playing The Bounce Update
Not much happening with this year’s edition of “Playing The Bounce.” Initial list of qualifiers posted a loss of 1% in October, while the S&P 500 was up 3.7%.
Playing The Bounce Strategy 2010: Individual Stocks and Equity Groups
“Playing The Bounce” season is once again upon us. This is a tactical trading strategy designed to identify beaten-down stocks which come under heavy selling pressure at year end. When selling abates, stocks tend to “bounce.”
Playing The Bounce 2009—Most Of The Market Has Already Bounced
Most stocks, especially low quality stocks, have already bounced so there will be no Playing The Bounce strategy this year.
Playing The Bounce Update: Big Bounce At Year End After Plunge In October
“Playing The Bounce” strategy produced impressive gains in December, but results are still negative from October introduction.
Playing The Bounce 2008—Market Due For A Bounce In December
It may not be a very good “Playing The Bounce” year. Not very many investors or portfolio managers have capital gains to offset.
Playing The Bounce 2008—Market Due For A Bounce In November
It may not be a very good “Playing The Bounce” year...
Playing The Bounce 2008 - Most Of The Market Due For A Bounce
October brings our annual exercise in the “Playing The Bounce” strategy. This month’s “Inside The Stock Market” presents the initial run of stocks which may be subject to heavy tax loss selling. Traditionally, these stocks may be poised to “bounce” back early in the next year as selling pressure wanes.
Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
We did get a bounce stock rally in January, but it still was a disappointing bounce year overall.
Playing The Bounce Update: Activated In Managed Accounts As 6% Holding
In mid-December, readers were notified via an Interim Memo of our decision to “Play The Bounce” in our managed accounts.
Playing The Bounce 2007 Update
May “Play The Bounce” if stocks sell off in December.
Playing The Bounce 2007 Update—Caution Advised
We have had some concerns about playing the bounce this year. The stock market has absorbed (ignored) an abundance of bad news only to move higher, placing its faith in further Fed rate cuts.
Playing The Bounce 2007 Update—Caution Advised
It’s that time of year when we roll out the annual “Playing The Bounce” strategy.
Playing The Bounce Update: Bounce Losing Steam...Exit Strategy In Progress
This year’s Bounce faded in December and January, reversing what looked to be an excellent bounce season to just a “so-so” one.
Playing The Bounce Update: Bounce Falters In December (Individual Investor Tax Selling)
The weak December performance is to be expected, as many of these “Bounce” stocks likely came under additional selling pressure as individuals were cleaning out their portfolios at year end.
Playing The Bounce Update: Bounce Working Nicely So Far
Prior to 1992, the returns generated by this exercise were in the 15% to 20% range before being closed out in the subsequent year. 2006-2007 performance is so far on track to match or exceed this range.
Playing The Bounce Update: We Are Now In The Traditional “Bounce” Season
Prior to 1992, the returns generated by this exercise were in the 15% to 20% range before being closed out in the subsequent year. 2006-2007 Performance is so far on track to match or exceed this range.
2006 Could Be A Good “Playing The Bounce” Year
“Playing the Bounce” screening strategy details and 2006 initial “bounce” stock qualifiers.
Playing The Bounce Update: Good Bounce In January
Small caps and large caps had a nice bounce in January, so-so for mid caps.
Playing The Bounce 2005 Update
Good but not a great “Bounce”, so far.
Playing The Bounce Update: Nice Bounce In November
The strong November results (across all three market caps) has now propelled the 2005 “Bounce” strategy to superior performance.
Playing The Bounce Update: We Are Now In The Traditional “Bounce” Season
No rebound yet in the “Playing The Bounce” stocks. Could see turnaround in November.
Playing The Bounce 2005-2006
It’s Bounce season again, and Jim Floyd and Patrick Magnusson present the preliminary list of potential stocks that may rebound after being beaten down in 2005. Consumer Discretionary stocks are most plentiful on the list.
Heads Up....It's Almost Time To "Play The Bounce"
Buy early and avoid the December rush. 2005 stock market could be shaping up as a good year for buying the big losers, as the institutional tax selling deadline approaches (October 31st).
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