More interesting is the fact that investors could have positioned in a contrarian way for this kind of reversal by picking up discarded, disliked and discounted stocks — and perhaps still can.
Heading into December, I screened for stocks in the S&P 500 that had dropped at least 10 percent through November and on which Wall Street had given up, with fewer than a quarter of analysts assigning them "buy" ratings. Many of the resulting names were also heavily shorted. A CNBC Pro column on Nov. 30 cited 17 stocks that met these criteria, many from stressed areas within the industrial, energy and consumer sectors, suggesting that they could be turnaround candidates in the New Year.
This basket of stocks has handily outperformed the S&P 500 both since the column appeared and year to date in 2016. Since Nov. 30, the S&P 500 is down 7.4 percent, while the basket of 17 hated stocks is down 4.2 percent. So far in 2016, those 17 stocks as a group are up 0.2 percent, versus the S&P 500's 5.9 percent loss.
That relatively steady performance obscures plenty of wild action in some of the individual names. There are nine winners against eight losers within the group so far this year. Still, Owens-Illinois is down nearly 18 percent and NetApp off more than 8 percent for 2016, offsetting big winners Fossil and Cummins. And since Nov. 30, five of the 17 stocks are off by double digits, indicating how jumpy and hazardous this market has been.