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).

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

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

GOOG Google Inc
MSFT Microsoft Corp
DOW Dow Chemical Co
HPQ Hewlett-Packard Co
UPS United Parcel Service Inc

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