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).

XLK Technology Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLV Health Care Select Sector SPDR Fund

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

CAT Caterpillar Inc
GE General Electric Co
EMC EMC Corp
TXN Texas Instruments Inc
PM Philip Morris International Inc
HAL Halliburton Co
ABT Abbott Laboratories
RTN Raytheon Co
COP ConocoPhillips
UNP Union Pacific Corp
BMY Bristol-Myers Squibb Company
BRK.B Berkshire Hathaway Inc

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