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
XLE Energy Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

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

JNJ Johnson and Johnson
EMR Emerson Electric Co
AXP American Express Co
RTN Raytheon Co
GD General Dynamics Corp
PEP Pepsico Inc
KO The Coca Cola Co
QCOM QUALCOMM Inc
COP ConocoPhillips
EXC Exelon Corp
COF Capital One Financial Corp
JPM JPMorgan Chase & Co
FDX FedEx Corporation
PG Procter & Gamble Co
OXY Occidental Petroleum Corp
MSFT Microsoft Corp
BAX Baxter International Inc
UPS United Parcel Service Inc

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