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
XLE Energy 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).

DOW Dow Chemical Co
MSFT Microsoft Corp
JNJ Johnson and Johnson
GS Goldman Sachs Group Inc
BHI Baker Hughes Inc
DD E I du Pont de Nemours and Co
INTC Intel Corp
HPQ Hewlett-Packard Co
UNP Union Pacific Corp
CVX Chevron Corp
EBAY eBay Inc
MMM 3M Company
JPM JPMorgan Chase & Co
USB US Bancorp
MS Morgan Stanley
MRK Merck & Co Inc
GE General Electric Co
NSC Norfolk Southern Corp
DIS The Walt Disney Co
COP ConocoPhillips
C Citigroup Inc

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