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).

XLP Consumer Staples Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLU Utilities Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

UNP Union Pacific Corp
COP ConocoPhillips
XOM Exxon Mobil Corp
C Citigroup Inc
LMT Lockheed Martin Corp
HPQ Hewlett-Packard Co
OXY Occidental Petroleum Corp
MCD McDonald's Corporation
EXC Exelon Corp
SLB Schlumberger Ltd
BHI Baker Hughes Inc
DVN Devon Energy Corp

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