The week in five lines
Regime read: Mixed. Mega-cap growth was sold while the rest of the market held: equal-weight beat the S&P 500 by 1.4% and health care led.
Last week's read: Week 43's Mixed read was not consistent with the week that followed: four of five risk-on measures. Regime record: 2 of 3.
Where money moved: into biotech, health care, materials, financials and value; out of semis, software, communications, Taiwan, Brazil and gold.
New model states: XLY, XLF, XLB, XLE, XLV and IBB aligned positive; QQQ, EWJ, XLC, GLD, ICLN and EEM aligned negative.
Events ahead: US midterm elections Tue 3 Nov; US payrolls Fri 6 Nov, 13:30 UK. US clocks change today, so New York opens at 14:30 UK again.
The S&P 500 fell this week, but most of the market did not. Friday's selloff was concentrated in the largest growth names: semis fell 7% on the day, the Nasdaq-100 3.5% and Korea and Taiwan with them. Underneath, equal-weight beat the index, discretionary turned up on the weekly chart, and biotech, health care, materials and financials all moved into the daily Leading group. Rates eased again after the Fed held on Wednesday, and duration found a bid for a third week. The model reads this as Mixed: a broadening market whose leadership is being repriced, not money leaving equities.
Three things stood out. Communications turned down on the weekly chart, the first sector to do so in this run. Brazil fell almost 24% after Sunday's presidential runoff, an event the market had not priced, and that single move accounts for both structure breaks in the log this week. And gold fell again while real yields fell, so the gap between the two widened for a second week.
I also have to record a miss. Last week I read the market as Mixed, and by the rule I publish it was a risk-on week: four of the five measures moved the risk-on way, even though the index itself fell. The read was right about where the money was going and wrong about the score, and the score is what counts. The regime record is now 2 of 3, and it stays on the Logs page as it is.
The full Week 44 report covers the daily and weekly rotation maps, the ratios, flow, the twelve new model states with their levels, the weekly trend-change watch and what would change the read.
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. 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. Published by Blueprint Three Consulting Limited, which is not authorised by the Financial Conduct Authority.