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).

XLP Consumer Staples Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLV Health Care Select Sector SPDR Fund

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

UPS United Parcel Service Inc
TXN Texas Instruments Inc
MO Altria Group Inc
MMM 3M Company
GS Goldman Sachs Group Inc
GE General Electric Co
FCX Freeport-McMoRan Copper & Gold Inc
EMC EMC Corp
CL Colgate Palmolive Co
BRK.B Berkshire Hathaway Inc
BK The Bank of New York Mellon Corp
ABT Abbott Laboratories

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