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
XLB Materials Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund

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

FDX FedEx Corporation
SBUX Starbucks Corp
FCX Freeport-McMoRan Copper & Gold Inc
AEP American Elec Pwr Co Inc
HNZ HJ Heinz Company
COST Costco Wholesale Corporation
GE General Electric Co

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