The 2016 bottom × March 2020: two recompositions, two clocks

Comparison

What rhymes

These are two recompositions coming out of a bottom, and the archive reads them with the same vocabulary. In both, capital repositioned before the narrative closed: the structure of relative prices turned, the havens emptied, the squeezed assets came back to the table. In both, the panel's gauges — mood, flow, currency, rates — did not move together. And in both, the Radar's initial reading was the same: record an extreme, with a date, with no bottom call.

What differs

The speed and the order of the clocks were opposite. In 2016, the recomposition was slow and began with the structure: the intermarket improved three straight months and crossed into strong risk-on only in March 2017 (70.6), a year after the turn — with the Selic high the whole time (14.25%) and the first cut arriving only at the end (12.25%). It was a marathon, led by allocation, with the rate as the last piece. In 2020, the flow clock raced: risk appetite retraced almost the entire path in three months, with the Selic already on its way to the low. But there the laggards were others — mood took months to catch up to appetite and the currency never came back, closing March 2021 still above R$ 5.60 after marking an anomaly at R$ 4.88 in the panic. In 2016 the lag was in rates; in 2020, in mood and the currency.

What didn't happen

Neither of the two was a clean V. In 2016, anyone who read the March turn as uphill faced a mood that overheated in June (Ânima at 89.7) and a quantitative reading that collapsed to zero in September. In 2020, anyone who read the appetite recovery as "everything normalized" got the flow right and the currency and the sentiment wrong. Recoveries that looked alike in diagnosis resolved by paths that bore little resemblance.

Honest verdict

Every recovery inverts the same axes — structure, mood, currency, rates — but rarely in the same order and never at the same pace. Knowing you are coming out of a bottom does not tell you which clock will lead nor by how much each one will lag.

Continue the story: The 2016 bottom — structure before mood · What happened after fear priced everything · What intermarket is →

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

Characters: Structure (intermarket) · Mood · Dollar · Rates (Selic)