Assets Continue To Aggressively Flow Into Technology

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
Conclusion, Investment Implications, Strategy

This week, economically sensitive Technology (XLK) moves back into the top spot according to the SEAF Model, for the 19th time in the past 27 weeks.  Meanwhile, Utilities (XLU) moves up to #2 this week, and defensive Health Care drops to #3 from the #1 ranking a week earlier.  Year-to-date, XLK and XLU are the first- and third-best-performing sectors while outpacing the benchmark S&P 500 (SPY) by 13.0% and 1.4%, respectively.  At the other end of the spectrum, defensive Consumer Staples (XLP) and economically sensitive Energy (XLE) are 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 Technology in All time periods.
  • Money is aggressively moving into Health Care in the Tactical and Strategic time periods.
  • Money is aggressively moving into Financials 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 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 10-30-2025. Click the table above to enlarge

The latest data indicate a multi-timeframe trend of asset inflows into the Technology 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 Energy and Financial sectors.  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).

Technology (XLK)

Offensive Technology (XLK) is the SEAF Model’s top-ranked sector this week with a Ranking score of 3, which is the best score possible.  Technology has been one of the top three-ranked sectors for 25 of the past 27 weeks beginning on Apr 24th, and has been the top-ranked sector 19 times during this period.  Chart 1 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.  As a result, year-to-date (YTD), according to sectorspdrs.com, XLK is the best-performing Sector SPDR ETF, rising by 29.3% while outperforming SPY by 13.0%.

Chart 1

Utilities  (XLU)

Utilities (XLU) is the SEAF Model’s second-ranked sector this week with a Ranking score of 11, up from 16 a week earlier, and has been one of the top two best-ranked sectors for five of the past six weeks.  The green highlights in Chart 2 below show that Utilities regained Favored status on September 23rd (upper panel), and that XLU has outperformed the benchmark S&P 500 (SPY) by 2% since then, down from 8% of relative outperformance two weeks earlier.  Year-to-date, according to sectorspdrs.com, XLU  is currently the third-best-performing Sector SPDR ETF, rising by 17.7% while outperforming the S&P 500 (SPY) by 1.4%. 

Chart 2

Health Care (XLV)

Defensive Health Care (XLV) is the SEAF Model’s third-ranked sector this week with a Ranking score of 14, down from 8 a week earlier.  XLV has actually maintained a Favored SEAF status since Oct 2nd, but Chart 3 below shows it has been bumping along the bottom of Favored territory for much of that time, while XLK has been a relative performer (equal to SPY).  It would probably take a stronger, sustained Favored ranking to drive relative outperformance in XLV.  Year-to-date, according to sectorspdrs.com, Health Care is the fifth-worst-performing Sector SPDR ETF, rising by 4.8% while underperforming SPY by 11.4%. 

Chart 3