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: Investors Aggressively Positioning For More Broad Market Weakness
Conclusion, Investment Implications, Strategy

The SEAF Model graphic below shows a very well-defined defensive distribution of investor asset flows based on data through the end of last week.  Defensive sectors are occupying the top three spots according to our model’s ranking system, and typically offensive, Risk On sectors are occupying the bottom three spots.  This indicates the market has positioned itself for more broad market weakness, attempting to capitalize on any further relative outperformance by defensive sectors while the broad market continues to weaken.  It would take a complete realignment of these SEAF Model rankings, with the offensive sectors currently occupying the bottom of the graphic moving back to the top, to indicate that the market is betting on an emerging market bottom. 

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 Health Care, Utilities, and Consumer Staples in All time periods.
  • Money aggressively moving out of  Technology and Consumer Discretionary in All time periods.
  • Money aggressively moving into Energy in the Tactical 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 Health Care and Utilities.  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: 04-07-2025

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).

Health Care (XLV)

Defensive Health Care (XLV) is tied with Utilities (XLU) for the SEAF Model’s top-ranked sector this week with a Ranking score of 7.  Health Care has been one of the top-three-ranked sectors for the past six weeks beginning on Mar 3rd.  As a result, through the end of last week, XLV was the third-best-performing Select Sector SPDR ETF year to date (YTD).  The green highlights in Chart 1 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 6% since then (lower panel).  

Chart 1

Utilities: XLU

Defensive Utilities is tied with Health Care (XLV) for the SEAF Model’s top-ranked sector this week with a Ranking score of 7.  Utilities has been one of the top-four-ranked sectors for the past four weeks beginning on Mar 17th.  As a result, through the end of last week, XLU was the second-best-performing Select Sector SPDR ETF YTD.  The green highlights in the upper panel of Chart 2 below show that Utilities initially moved into Favored territory on Feb 7th (upper panel) and, with the exception of a few quick moves in and out of Neutral status, has remained there since.  The lower panel shows that XLU has coincidentally outperformed the S&P 500 (SPY) by 12%.

Chart 2

Consumer Staples: XLP

Defensive Consumer Staples (XLP) is the SEAF Model’s third-best-ranked sector this week with a Ranking score of 10. Consumer Staples has only been one of the top-three-ranked sectors for the past two weeks beginning on Mar 27th.  However, as the lower panel of Chart 3 below shows, XLP has outperformed the broad market S&P 500 (SPY) by 9% since April 2nd as investors presciently rushed into defensive sectors to avoid the huge 15.0% US broad market decline market decline between April 2nd and today.

Chart 3