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
XLI Industrial Select Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund

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

HON Honeywell International Inc
EMR Emerson Electric Co
MCD McDonald's Corporation
LOW Lowe's Companies Inc
DIS The Walt Disney Co
TWX Time Warner Inc
HD Home Depot Inc
UNP Union Pacific Corp
NOV National Oilwell Varco Inc
SLB Schlumberger Ltd
SO Southern Co
BRK.B Berkshire Hathaway Inc
MET MetLife Inc
GS Goldman Sachs Group Inc

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