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: Finance Leads
Conclusion, Investment Implications, Strategy

The recent defensive distribution of sector asset flows continues.  The SEAF Model retained two of last week’s top-three ranked sectors this week, cyclical Financials (XLF) and defensive Health Care (XLV), while adding another defensive sector, Consumer Staples (XLP), to top three status.  At the other end of the spectrum, the three worst-ranked sectors according to SEAF — Technology (XLK), Industrials (XLI), and Consumer Discretionary (CLY) — all repeats from the previous week, 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 continues to aggressively move into Financials in the Trading and Strategic time periods.
  • Money aggressively moving into Health Care in the Tactical and Strategic time periods.
  • Money aggressively moving out of  Health Care and Energy in the Trading time period.
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 Financials and Health Care.  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: 03-27-2025

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).

Financials: XLF

Cyclical Financials (XLF) is the SEAF Model’s top-ranked sector this week with a Ranking score of 7, its second time back among the top three best SEAF rankings since Mar 3rd.  Through Friday Mar 28th, the Sector SPDR Financials ETF is up 0.4% year to date (YTD).  The rightmost green highlights in Chart 1 below show that Financials have most recently moved into Favored status on Mar 14th (upper panel), while XLF has coincidentally outperformed the benchmark S&P 500 (SPY, lower panel) by 5%.  The other green highlights show that previous periods of Favored status by Financials over the past twelve months have also coincided with relative outperformance by XLF versus SPY.

Chart 1

Consumer Staples: XLP

Defensive Consumer Staples (XLP) is the SEAF Model’s second-best-ranked sector this week with a Ranking score of 12, rising to a Favored ranking as of Mar 27th from a fourth-worst ranking score of 22 just a week earlier.  Through Friday Mar 28th, the Sector SPDR Consumer Staples ETF is up 2.3% year to date (YTD).  The rightmost green highlights in Chart 2 below show that the prior Favored ranking by Consumer Staples was between Feb 24th and Mar 11th (upper panel) and coincided with 6% of relative outperformance by XLP  over the S&P 500 (SPY, lower panel).  Before that, the next most recent Favored status by Consumer Staples was all the way back in early October 2024.  The recent rush of money into Consumer Staples is likely a defensive move by investors in anticipation of more US broad market weakness.

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 14 and has been one of the top-three-ranked sectors for the past five weeks, helping to propel the Sector SPDR Health Care ETF to becoming 2025’s second strongest sector YTD, up 5.1%.  The green highlights in Chart 3 below show that Health Care initially moved into Favored territory on Feb 25th (upper panel) and that XLV has coincidentally outperformed the benchmark S&P 500 by 5% since then (lower panel).  A closer look at the upper panel shows that Health Care is barely hanging onto Favored status this week.  As long as it does so, recent relative sector outperformance is likely to continue.  A move out of Favored status, however, would warn that a stall in recent relative outperformance is likely. 

Chart 3