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).

XLF Financial Select Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLV Health Care Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund

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

MS Morgan Stanley
JNJ Johnson and Johnson
XOM Exxon Mobil Corp
CVS CVS Caremark Corp
ALL Allstate Corp
ACN Accenture PLC
GS Goldman Sachs Group Inc
GOOG Google Inc
NSC Norfolk Southern Corp
MMM 3M Company
UPS United Parcel Service Inc
CL Colgate Palmolive Co
BRK.B Berkshire Hathaway Inc
PEP Pepsico Inc
MRK Merck & Co Inc
PFE Pfizer Inc
CSCO Cisco Systems Inc
EMR Emerson Electric Co
GE General Electric Co

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