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).

XLV Health Care Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

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

EMR Emerson Electric Co
DIS The Walt Disney Co
CVX Chevron Corp
DOW Dow Chemical Co
GD General Dynamics Corp
RTN Raytheon Co
XOM Exxon Mobil Corp
COP ConocoPhillips
MS Morgan Stanley
DD E I du Pont de Nemours and Co
ABT Abbott Laboratories
AEP American Elec Pwr Co Inc
BAX Baxter International Inc
BMY Bristol-Myers Squibb Company
AMGN Amgen Inc
CAT Caterpillar Inc
MET MetLife Inc

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