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
XLB Materials Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLV Health Care Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund

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

DOW Dow Chemical Co
UNP Union Pacific Corp
IBM International Business Machines Corp
HD Home Depot Inc
APC Anadarko Petroleum Corp
CVX Chevron Corp
BK The Bank of New York Mellon Corp
COP ConocoPhillips
MET MetLife Inc
FCX Freeport-McMoRan Copper & Gold Inc
CAT Caterpillar Inc
BHI Baker Hughes Inc
FDX FedEx Corporation
ORCL Oracle Corporation

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