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).

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

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

GE General Electric Co
ALL Allstate Corp
SBUX Starbucks Corp
WMB Williams Companies Inc
LLY Eli Lilly and Co
EMC EMC Corp
LMT Lockheed Martin Corp
NWSA News Corp
KO The Coca Cola Co
BAC Bank of America Corp
IBM International Business Machines Corp
XOM Exxon Mobil Corp
MO Altria Group Inc
DOW Dow Chemical Co
F Ford Motor Co
HD Home Depot Inc
MON Monsanto Co
HON Honeywell International Inc
PFE Pfizer Inc
UPS United Parcel Service Inc
CVX Chevron Corp
PG Procter & Gamble Co
VZ Verizon Communications Inc
COP ConocoPhillips

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