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
XLV Health Care Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund

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

MDT Medtronic Inc
CVS CVS Caremark Corp
JNJ Johnson and Johnson
LLY Eli Lilly and Co
CAT Caterpillar Inc
WFC Wells Fargo & Company

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