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
XLY Consumer Discretionary Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

EMR Emerson Electric Co
XOM Exxon Mobil Corp
V Visa Inc
CVX Chevron Corp
AMGN Amgen Inc
T AT&T Inc
CVS CVS Caremark Corp
UNP Union Pacific Corp
BAX Baxter International Inc
RTN Raytheon Co
GILD Gilead Sciences Inc
NOV National Oilwell Varco Inc
GOOG Google Inc
HON Honeywell International Inc
F Ford Motor Co
CL Colgate Palmolive Co

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