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).

XLB Materials Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

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

COF Capital One Financial Corp
WMB Williams Companies Inc
IBM International Business Machines Corp
JPM JPMorgan Chase & Co
GE General Electric Co
TWX Time Warner Inc
BK The Bank of New York Mellon Corp
SBUX Starbucks Corp
DOW Dow Chemical Co
NWSA News Corp
GS Goldman Sachs Group Inc
EBAY eBay Inc
UNP Union Pacific Corp
KO The Coca Cola Co
VZ Verizon Communications Inc

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