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

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

INTC Intel Corp
UNP Union Pacific Corp
HPQ Hewlett-Packard Co
C Citigroup Inc
NSC Norfolk Southern Corp
TGT Target Corporation
NWSA News Corp

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