Informational Edge Stacking 2.0 — Part I

Most regime calls fail in the same way: not because the market picked the wrong direction, but because people assume that once price moves, the economy must already be moving with it.

That is usually where the trouble starts.

Markets can price relief before there is any real repair. They can price a softer policy path before housing improves, before banks start lending more freely, before labour demand stabilises, and before the more fragile corners of the economy stop behaving as though conditions are still tight. A rally can therefore make perfect sense in first-order market terms and still be too early, too narrow, or too financial to deserve real conviction.

That is the gap Informational Edge Stacking 2.0 is trying to close.

The first version of this framework was built to answer a useful and necessary question: what kind of regime is the market trying to price? It used internal equity rotations to get there. We began with Cyclicals vs Defensives, then added Value vs Growth and High Beta vs Low Vol to separate growth, inflation, rates, and risk appetite. From there we moved closer to the real economy through Small Caps vs Large Caps, Transports vs Industrials, the Purchasing Managers’ Basket, and the Labour Basket. That architecture still works because it forces you to stop staring at the headline index and start paying attention to how capital is rotating underneath it.

All of the new custom baskets have been provided and can be added to trading view or bloomberg.

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