The D1–D4 cascade
How a macro story transmits from the first headline to final price displacement.
Intellectual core
The D1–D4 framework shows how a macro story transmits through markets — from the first headline to the final price displacement. DEPTH4 theses are causal cascades, not static predictions. D1 causes D2. D2 causes D3. D3 causes D4. Each level is a consequence of the previous, and each level can affect different assets.
Why depth matters for trading
Most traders stop at the headline and the first tick. The edge is often later in the chain: credit after rates, leadership rotation after a risk shock, regime repricing after a policy shift. Room (unpriced move) is estimated per depth, per asset, per thesis — so a story can be mostly priced at D2 while D3 still has moderate or wide room. SIGNALS conglomerate those depth–asset pairs so the dashboard shows where consensus and leftover room still align.
How to read the cascade
| Depth | Label | What happens | Example assets |
|---|---|---|---|
| D1 | Early | First assets react to the raw event | Rates (TLT, IEF), FX (EURUSD), Commodities (GLD, HG) |
| D2 | Direct | Narrative forms; correlated assets move | Equities (SPY, QQQ), Sector ETFs (GDX, XME), Credit |
| D3 | Target ★ | Primary asset the thesis is about | TLT (bonds thesis), GLD (gold thesis) |
| D4 | Ripple | Secondary effects across markets | Broader risk-off, correlation breaks, vol expansion |
Where each feature lives
| Feature | Depth | Role |
|---|---|---|
| Feed | D1→D2 | What just happened, what's forming |
| Theses | D2→D3 | Narrative and positioning |
| Signals | D3→D4 | Tradeable output, price displacement |
| Blind spot | Each depth | Measured independently at every level |
How to use this in the app
On a thesis detail page, walk D1→D4 before you trust the SIGNAL card. Ask: what is the root event, what reacts first, what is the primary trade target, and what ripples later? If timing or assets jump levels without a causal link, treat conviction as lower until evidence catches up.
Cascade first, ticker second — that is the DEPTH4 habit.