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

Assets Flocked To Defensive Health Care, Staples Last Week
Click Here For This Week’s SEAF Model “Rainbow Charts” Update
Conclusion, Investment Implications, Strategy

As the benchmark S&P 500 set new all-time highs last week, defensive Health Care (XLV) and Consumer Staples (XLP) were moving to the top of the list of sectors attracting the most capital, according to the SEAF Model.  XLV and XLP moved to #1 and #3 in SEAF’s composite Ranking scores last week, while Technology came in at #2.  Technology has been one of the top three sectors for 24 of the past 26 weeks, beginning on Apr 24th, and has been the top-ranked sector 18 times during this period, which is why it is the best-performing sector this year.  We believe that XLV and XLP ranked so highly this week because the S&P 500 has risen by 42% since April, while uncertainty above tariffs, geopolitical trade relationships, and the future independence of the Fed — among other issues — remain unresolved, so managers are hedging their bets.  At the other end of the spectrum, and for the fifth consecutive week, cyclical Financials (XLF) has been one of the two worst-ranked sectors.

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 our SEAF Rainbow Charts and a heat map that provide more color and detail on where sector-related assets are going, and where they are coming from, in the 11 Sector SPDR ETFs which together comprise the S&P 500.   Our Rainbow Charts highlight SEAF’s previous 12 months of Favored, Neutral, and Avoid rankings. 

From The Video: This Week’s Major Themes
  • Money is aggressively moving into Health Care in the Tactical and Strategic time periods.
  • Money is aggressively moving into Energy and Industrials in the Trading time period.
  • Money is aggressively moving out of Financials in All 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 where the money is going and to avoid the sectors where the money is coming out.  

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.

Data through 10-23-2025. Click the table above to enlarge

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

The latest data also indicate a multi-timeframe trend of asset outflows from the Financial sector.  This is where the money is coming from.

SEAF Heat Map

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 October 16th.  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 the SEAF Model’s top-ranked sector this week with a Ranking score of 8.  XLV has actually has maintained a Favored SEAF status since Oct 2nd, as shown in Chart 1 below, but has only made the top three twice during this period because its composite Ranking score has remained relatively low. This means that a significant amount of investor assets have been positioned defensively over the past month, but not aggressively so, which explains the lack of relative outperformance by XLV versus the S&P 500 (SPY) since then.  Year-to-date, according to sectorspdrs.com, XLV is the sixth-best-performing Sector SPDR ETF, rising by 6.2%, while underperforming SPY by 9.3%. 

Chart 1

Technology (XLK)

Offensive Technology (XLK) is the SEAF Model’s second-ranked sector this week with a Ranking score of 13, slightly lower than the previous week’s score of 12 and down near the bottom of Favored territory.  Nevertheless, Technology has been one of the top three-ranked sectors for 24 of the past 26 weeks beginning on Apr 24th, and has been the top-ranked sector 18 times during this period.  Chart 2 below shows that XLK has outperformed the benchmark S&P 500 (SPY, lower panel) by 8% since initially moving back into Favored status on Sep 9th, after aggressively outperforming between Apr 24th and Aug 19th amid a sustained Favored ranking.  Year-to-date (YTD), according to sectorspdrs.com, XLK is the best-performing Sector SPDR ETF, rising by 26.3% while outperforming SPY by 10.8%. This is the direct result of a consistent Favored SEAF Ranking since late April.

Chart 2

Consumer Staples  (XLP)

Defensive Consumer Staples (XLP) is the SEAF Model’s third-ranked sector this week with a Ranking score of 15, which is the lowest composite Ranking score possible in Favored status. The green highlights in Chart 3 below show that XLP has made numerous attempts since May to rise and remain in Favored status, and all have failed.  So, it’s too early to determine whether this is the real thing this time, or just another in a list of failed attempts to begin a sustainable trend of positive asset flows.  And, until we get more data, we are going to assume the latter.  Year-to-date, according to sectorspdrs.com, XLP  is the worst-performing Sector SPDR ETF, rising by just 0.6% while underperforming the S&P 500 (SPY) by 14.9%.  

Chart 3