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).

XLY Consumer Discretionary Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLF Financial Select Sector SPDR Fund

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

DIS The Walt Disney Co
INTC Intel Corp
HPQ Hewlett-Packard Co
NWSA News Corp
MS Morgan Stanley
JNJ Johnson and Johnson
DOW Dow Chemical Co
JPM JPMorgan Chase & Co
UNP Union Pacific Corp
EMR Emerson Electric Co
HD Home Depot Inc
LOW Lowe's Companies Inc
TGT Target Corporation
ORCL Oracle Corporation

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