If the stock market can move sectors and stocks, which sectors and stocks are most likely to move in step with the stock market? Sectors and individual stocks most highly correlated to the overall market can use the S&P 500 SPDR ETF (SPY) as a directional indicator.

The following sectors are most correlated the S&P 500 SPDR ETF (SPY).

XLY Consumer Discretionary Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLK Technology Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund

The following individual stocks are most correlated the S&P 500 SPDR ETF (SPY).

IBM International Business Machines Corp
DD E I du Pont de Nemours and Co
AAPL Apple Inc
PG Procter & Gamble Co
WAG Walgreens
FCX Freeport-McMoRan Copper & Gold Inc
DOW Dow Chemical Co
V Visa Inc

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.