Sector Rotation Detector · Weekly Scan · Public preview

2 sectors are rotating · 9 stable

Scan day · Saturday, October 3, 2026

The 30-day window ending October 2 shows a decisively defensive breakdown and no new upside leaders. Two sectors cleanly flip from last year's leadership into laggard status — Utilities (RS swing of 7.87pp) and Health Care (4.26pp) — and both were mild outperformers in the same calendar window of 2025. Nine of the eleven sectors have negative relative strength versus SPY in Window A, no sector in this scan turns positive, and the only stable_positive reading is Technology, which continues to lead but with a shrinking relative edge (7.9pp vs 5.5pp a year ago). Communication Services, Consumer Discretionary, and Real Estate all show meaningfully wider underperformance than a year ago without clearing the sign-flip bar.

The single most surprising internal: biotech. XBI and IBB — the two biggest biotech funds in the Health Care lineup — print the largest 10-day net positive money flows of any health-care instrument scanned (+$1.66B and +$258M), while the broad XLV sees −$1.62B of outflows. That contradiction says the drag inside Health Care is almost certainly large-cap pharma and managed care, not the sector in bulk. Utilities money flow mirror-images that: XLU alone absorbs +$898M of net 10-day inflow despite the sector's 7.4% drop, while every other utility ETF (VPU, IDU, FUTY, RSPU) shows net outflows — consistent with tactical hedging being parked in the single most liquid vehicle while active capital exits the trade.

Headline rotation — fully revealed

Utilities

XLU

Turning negative ↘

RS · now-7.0%

RS · 1 yr ago+0.9%

Top ETF (by 10d flow)XLU

Thesis

Utilities flipped from a modestly leading sector a year ago (+0.9pp RS) to the single worst relative performer in this window (−7.0pp RS) — a 7.87-point swing that is the largest of any sector in the scan. The move reads as a bond-duration shock: the sector trades as a long-duration dividend proxy, and a 30-day drop this large with SPY essentially flat is almost always a rates re-pricing rather than earnings. The AI/data-center power-demand narrative that supported the sector through 2024-2025 appears to be cooling as a marginal flow driver; the lack of a single-day capitulation and the steady drift down the chart suggests mechanical selling by multi-asset models and dividend funds rather than headline risk. Internally, flows confirm the exit: every utility ETF except the mega-liquid XLU shows net 10-day outflows, and even XLU's +$898M inflow looks tactical given the uninterrupted price decline.

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Utilities

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