NEW! Weekly-updated PDF of all SEAF Rainbow Charts:  Click the link below to download a PDF of this new addition to our research services.

Click Here For This Week’s  SEAF Model “Rainbow Charts” Update
This Week’s Top Ranked Sectors: Fuel, Finance, and First Aid
Conclusion, Investment Implications, Strategy

The SEAF Model retained two of last week’s top-three ranked sectors this week, economically sensitive Energy (XLE) and defensive Health Care (XLV), while adding cyclical Financials (XLF) back into top three status following a one-month hiatus.  At the other end of the spectrum, the three worst-ranked sectors according to SEAF — Technology (XLK), Industrials (XLI), and Technology (XLK) — are all generally seen as being offensive and “risk on” in nature.

Beyond The SEAF Model Video: This Week’s Sector Themes

This weekly video by Jack Kosar goes into more detail on the latest SEAF Model data via a heat map that provides more detail on where sector-related assets are going, and where they are leaving, in the 11 Sector SPDR ETFs.  Jack also displays and discusses our SEAF “Rainbow Charts” which highlight SEAF’s past 12 months of Favored, Neutral, or Avoid rankings. 

From The Video: This Week’s Major Themes
  • Money aggressively moving into Energy in All time periods.
  • Money aggressively moving into Financials in the Trading and Strategic time periods.
  • Money aggressively moving into Health Care in the Trading and Tactical time periods.
The SEAF Model: Current Signals & Related Performance

Editor’s Note:  These are the latest specific trading signals generated by our SEAF Model, which also includes a rules-based money management component.  The backtested performance data below is based on trading a predetermined amount of assets with an equal allocation of those assets across the top three Rankings.  The model is updated once per week, on the weekend, and any rebalancing takes place on the market opening the following Monday morning.  This is the recommended way to invest via the SEAF Model.  Contact us for any additional clarification.

In the SEAF Model Graphic below, the Ranking column sorts the entire table of 11 sector ETFs according to the sum of rankings in the Trading (weekly), Tactical (monthly), and Strategic (quarterly) categories, from largest inflows to largest outflows.  The premise of the model is to invest in the sectors that the money is going into and to avoid the sectors the money is coming out of.  

The lower the Ranking number, the stronger the trend of asset flows going into that sector.  The top two sectors in each category, according to a positive change in inflows, are highlighted in green.  The top two sectors in each category, according to a negative change in outflows, are highlighted in red.

Click the table to make it larger

The latest data indicate a multi-timeframe trend of asset inflows into Health Care and Energy.  This is where the money is currently going in the sector space.

The latest data also indicate a multi-timeframe trend of asset outflows out of Technology and Consumer Discretionary.  This is where the money is coming from.

NEW! SEAF Heat Map

SEAF Heat Map: 03-21-2025

The SEAF Heat Map provides additional insight into the flows of the 11 Sector ETFs. Each time frame is independent, meaning the color spectrum for one period does not affect another. For example, the strongest inflow (dark green) for the trading week is separate from the strongest inflow for the tactical month.

The heat map visually represents the spectrum of inflows and outflows, with green indicating inflows and red indicating outflows. The more extreme the flow, the darker the corresponding color—deep green for strong inflows and deep red for strong outflows. Flows closer to yellow indicate minimal percentage change.

This tool serves as an additional layer of information to help investors not only identify where sector flows are moving but also gauge the relative strength of those flows compared to their peers.

SEAF Model Individual Sector Charts (“Rainbow Charts”)

The charts below display the weekly SEAF Model Ranking Scores over the previous 12 months for the strongest and weakest sectors through September 12th.  The line in the upper panel displays these weekly scores within the context of being Favored (3-15, green), Neutral (16-24, yellow), or Avoid (25-33, red) and also displays the trend of asset flows as the money moves in and out of these sectors.  The lower panel plots the corresponding weekly relative performance chart of that particular sector versus the S&P 500 (SPY).

Energy: XLE

Economically sensitive Energy (XLE) is the SEAF Model’s best-ranked sector this week with a Ranking score of 7, rising from a 3rd best ranking a week earlier and aggressively reversing from a 3rd worst ranking two weeks ago.  The green highlights in the upper panel of Chart 1 below show that Energy initially moved into Favored status on Mar 12th and has remained there since.  The lower panel shows that XLE has coincidentally outperformed the benchmark S&P 500 (SPY) by 3% as these expanding investor assets have helped drive the price of the ETF higher.  Energy is sometimes also considered to be a defensive sector because it is less impacted by economic downturns than many other sectors.

Chart 1

Financials: XLF

Cyclical Financials (XLF) is the SEAF Model’s second best-ranked sector this week with a Ranking score of 9, its first time back in the top three best SEAF rankings since Mar 3rd.  The green rectangle on the chart shows that the previous sustained period of a Favored ranking by Financials, between Jan 14th and Mar 3rd, coincided with 8% of relative outperformance by XLF versus the S&P 500 (SPY).  The longer that Financials maintains its current Favored status, the more likely XLF is likely to continue rising in price and outperforming the S&P 500.

Chart 2

Health Care (XLV)

Defensive Health Care (XLV) is the SEAF Model’s third best-ranked sector this week with a Ranking score of 11 and has been one of the top-three-ranked sectors for the past four weeks.  The upper panel of Chart 1 below shows that Health Care initially moved into Favored territory on Feb 25th.  The lower panel shows that XLV has coincidentally outperformed the benchmark S&P 500 by 3% since then.  The recent rush of investor assets into XLV represents an aggressive move toward defensive positioning by investors.

Chart 3