float ay;
float by;
PVector location;
PVector velocity;

void setup(){
  size(500,250);
  location=new PVector(50,100);
  velocity=new PVector(1,random(.1,2));
  smooth();
}
void draw(){
  ay=mouseY;
  by=mouseY;
  background(100);
  location.add(velocity);
  rect(0,ay,20,100);
  rect(480,by,20,100);
  ellipse(location.x,location.y,10,10);
  if((location.x>475&&location.y>by&&location.y<by+100)
  //||(location.x>30&&location.y>ay&&location.y<ay+100) // uncomment me to see the problem!
  ){
    velocity.x=velocity.x*-1;
    velocity.y=velocity.y*-1;
  }
  if(location.y>height-5||location.y<5){
    velocity.y=velocity.y*-1;
  }
}