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Euphoria at the top — March 2014, when appetite hit 100 and there was no follow-through

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The extreme

Euphoria seemed to have no ceiling — until it found the ceiling. In March 2014, appetite for domestic risk climbed to the highest point the scale allows, after setting out from the floor just three months earlier. The deep-seated fear of the start of the year turned into confidence without reservations, all at once.

But euphoria climbed alone. While mood was bursting, the intermarket structure barely breathed: it sat still on neutral ground, and the sector ratios inside the stock market did not confirm the enthusiasm. The thermometer read fever; the body had no temperature.

In numbers: the Perene Risk Index jumped from 31.8 to the ceiling of 100.0, while the intermarket stood motionless (54.08 → 53.88). Selic at 10.75% a year, the dollar firm at R$ 2.33.

What happened next

The euphoria lasted a month. In June 2014, three months later, the Perene Risk was at 62.9 — the report of the time itself recorded that March "reached 100.0 and gave it back." At six months, September 2014 undid everything: appetite plunged to 14.1, flipping into risk aversion, at the floor of the series. At nine months, December rehabilitated mood to 90.4, but with the intermarket already shrunk to 49.4. And at twelve months, March 2015 laid bare the whole crossing: the dollar at R$ 3.1395 (z-deviation of ~4), public debt at 59.49% of GDP, Selic at 12.75% — the antechamber of the crisis.

What did not happen

The peak of appetite was not followed by a continuation of the rally. The market tends to read 100.0 as confirmation of a trend; the archive shows the opposite. The intermarket never rose to validate the mood — it stayed neutral at 53.88 while the thermometer burst. Anyone who bought the euphoria expecting more celebration inherited, instead, the deterioration toward 2015.

The honest verdict

The reading got the enthusiasm of the moment right and caught the mismatch — mood at the ceiling, structure standing still — but the extreme of appetite was worth more as a warning of fragility than as a signal of continuation.

Continue reading: The end of the commodities' reign → · The 2015 crisis × the 2016 bottom →

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Characters: Flow (risk appetite) · Structure (intermarket) · Cyclicals × defensives · Dollar