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
XLI Industrial Select Sector SPDR Fund
XLK Technology 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).

JPM JPMorgan Chase & Co
MS Morgan Stanley
GE General Electric Co
MMM 3M Company
GS Goldman Sachs Group Inc
GOOG Google Inc
TXN Texas Instruments Inc
EMR Emerson Electric Co
CVS CVS Caremark Corp
DIS The Walt Disney Co
ORCL Oracle Corporation
CSCO Cisco Systems Inc
NWSA News Corp

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