Radar Perene / Archive / episode

The leadership no one celebrated — the mirrored rotation of November 2022

◦ Written under index methodology v1 (in effect until 15 Jul 2026). The current series is v2 — readings quoted here may differ from those shown today. See the methodology.

Episode

The extreme

There is a tell that betrays a rotation disguised as a turning point: when two ratios travel the same distance in opposite directions, they are not two events, they are one. That is what the board recorded at the close of 2022. Commodities rehabilitated themselves against the index while cyclicals surrendered the premium they had carried since the start of the quarter — in mirrored magnitudes. And the sum of the two did not add up to optimism. It added up to retreat. In numbers: commodities crossed from the back of the pack to the front of relative strength; in an almost exact counterweight, cyclicals made the reverse journey, from the front to the back — each move the near-perfect mirror of the other. Mood did not follow structure: the Ânima Index collapsed from 75.0 to 45.9 and the internal risk gauge pulled back from 88.4 to 25.9, crossing into risk-off. Selic nailed at 13.75% a year.

What happened next

Following the trail: the commodities' leadership inaugurated no cycle at all. In February 2023, three months later, capital rotated again — now into real estate funds, which crossed from the back to the front of the pack in relative strength, while domestic mood plunged once more, from 67.6 to 26.6. In May, six months later, the very commodities that had taken the throne sank, slipping from the middle of the pack to well behind it in relative strength. And in November 2023, a year later, appetite finally returned whole — the Perene Risk Index leapt from 8.0 to 67.1 — but by the hand of cyclicals and financials, not raw materials, which fell even further behind the pack.

What did not happen

The rehabilitation of commodities was not the beginning of a reign. Anyone who read the board's biggest turn as a sign of appetite for global risk would have been fooled: six months on, those same commodities were the most punished asset in the structure. Nor did mood find a floor there — it would return to the bottom in February before waking up. And that month's relative leadership was not strength: capital bought commodities without letting go of the defensives, with utilities still at the top of the reading. To lead in a market losing its appetite is to choose where to hide, not where to grow.

The honest verdict

Six months later, the engine itself classified that November as ambiguity: the realized return was 0.1%, outside the range that similar episodes had drawn, and the archive held only five comparable cases — too shallow a base for any clean reading. The rotation was real and sharp; what it announced was not. The perfect mirror between the two ratios said there had been a turn — never where the cycle would go.

Continue reading: Cyclicals vs. defensives — who leads each regime · When the gauges disagree · The end of the commodities' reign →

The Radar reads these regimes every day. See today's reading →

Characters: Structure (intermarket)