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

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: the Commodities/IBOV ratio jumped from a z of -1.44 to +1.00; in an almost exact counterweight, Cyclical/Non-Cyclical fell from +1.71 to -0.73, a Δ of -2.44. 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 flipped from a z of -0.67 to +0.76, 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: the ratio against the IBOV fell from -0.25 to -1.25 standard deviations. 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 drifted even further from their averages (-1.53).

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/IBOV still at the top of the reading (+1.80). 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 expected central band, and only five comparable episodes sustained the distribution — 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 →

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Characters: Structure (intermarket)