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).

XLY Consumer Discretionary Sector SPDR Fund
XLK Technology Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

CSCO Cisco Systems Inc
MDT Medtronic Inc
SLB Schlumberger Ltd
DELL Dell Inc
FCX Freeport-McMoRan Copper & Gold Inc
IBM International Business Machines Corp
GOOG Google Inc
PFE Pfizer Inc
CVX Chevron Corp
WFC Wells Fargo & Company

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