━━━ CAPITAL FLOWS GLOBAL
The Weekly Letter
Week 41 · 5–11 October 2026 · NY closes Fri 9 Oct · Issue 01
Rotation · Flow · Regime — model output, general market research
The week in five lines
Regime read: Mixed. Volatility is low (VIX 14.85), but a 5.24% ten-year yield, a 2.87% real yield and a firm dollar are tightening conditions underneath.
Last week's read: none to compare. This issue opens the signal log.
Where money moved: into large-cap growth, energy, healthcare, software and Brazil; out of cyclicals, small caps, Europe, real estate and gold.
Model states: SPY, QQQ, XLK, XLE, XLV, IGV and EWZ aligned positive; INDA and TLT aligned negative.
Event ahead: US CPI for September, Wed 14 Oct at 13:30 UK.
Where money moved
The market is pricing strong growth and higher rates at the same time. Volatility is subdued and US large-cap growth leads, but the funding gauges point the other way: the ten-year yield sits 15.8% above its weekly EMA55 and the real yield 29.9% above it, the steepest trend of anything the model tracks.
Real yields are the binding constraint, and the ratio board shows where the pressure falls: bonds against stocks (TLT/SPY) are 17.3% below trend, gold against real yields 25.4% below, small caps against large caps 5.5% below, and equal-weight against cap-weight 4.4% below. What remains strong is scale: cash-rich mega-caps, energy, healthcare and software. Inside tech, software outperformed semis by 8.6% on the week.
Energy has a macro source. Brent has held above $100 with Strait of Hormuz flows disrupted, and XLE closed 17.2% above its weekly EMA55 with weekly inflow.
Model states
Instruments where the four-hour signal, daily trend, weekly trend and flow agree. The structure level is the daily EMA55; a completed New York daily close through it would change the model's reading.
Aligned positive | Fri close | Structure level |
|---|---|---|
SPY | 778.57 | 763.26 |
QQQ | 751.27 | 725.74 |
XLK | 198.78 | 189.30 |
XLE | 65.08 | 62.12 |
XLV | 170.81 | 167.02 |
IGV | 112.67 | 103.78 |
EWZ | 43.54 | 37.66 |
Aligned negative | Fri close | Structure level |
|---|---|---|
INDA | 46.03 | 48.16 |
TLT | 77.98 | 80.98 |
Thirteen instruments sit within 3.5% of their weekly EMA55 with the daily trend already against them (XLB, EZU, KRE, XLP, XLC, GLD, XLI, XLY, XLF, ICLN, EFA, IWM, VNQ). The model flags these as possible weekly trend transitions and logs whether one occurs over the next four weekly closes.
Positioning
The latest CFTC data available for this issue (positions to Tue 29 Sep) show crowding at both ends of the rate trade. Large speculators sit near their most long in Nasdaq-100 futures (26-week index 95) and near their most short in Russell 2000 (index 7) and the euro (index 8). Historically, crowded positioning tends to unwind fastest when the underlying trend turns.
The week ahead
Wed 14 Oct, 13:30 UK · US CPI (September). The main scheduled driver of real yields this week, and therefore of the rate-sensitive end of the universe (TLT, IWM, VNQ, GLD).
Thu 15 Oct, 13:30 UK · US PPI, retail sales, claims, Philly Fed. Retail sales bears on consumer-facing sectors (XLY).
General market research describing the output of a rules-based model. Not investment advice or a personal recommendation, and not an invitation to buy, sell or hold any investment. Levels are model reference points, not entry, exit or sizing instructions. Disclosure: Capital Flows model tracking in Q4 2026 runs on a paper (non-live) account; the author separately trades gold and Nasdaq-100 CFDs, which relate to GLD and QQQ. Markets carry risk and you may lose money; past model readings are not a guide to future results. Sources: TradingView (NY closes), FRED (DFII10, Wed 7 Oct), CFTC via EdgeFinder, investingLive (calendar). Published by Blueprint Three Consulting Ltd, which is not authorised by the Financial Conduct Authority.