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
XLI Industrial Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

RTN Raytheon Co
WFC Wells Fargo & Company
CVX Chevron Corp
GE General Electric Co
FCX Freeport-McMoRan Copper & Gold Inc
VZ Verizon Communications Inc
MRK Merck & Co Inc

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