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

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

BRK.B Berkshire Hathaway Inc
MMM 3M Company
ACN Accenture PLC
EMR Emerson Electric Co
MA MasterCard Inc
EXC Exelon Corp
PEP Pepsico Inc
RTN Raytheon Co
GD General Dynamics Corp
MON Monsanto Co
C Citigroup Inc
HON Honeywell International Inc
JNJ Johnson and Johnson
DIS The Walt Disney Co
MET MetLife Inc
LMT Lockheed Martin Corp
SLB Schlumberger Ltd
HAL Halliburton Co

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