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).

XLV Health Care Select Sector SPDR Fund
XLU Utilities Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

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

PFE Pfizer Inc
AEP American Elec Pwr Co Inc
SO Southern Co
MMM 3M Company
NWSA News Corp
UTX United Technologies Corp
QCOM QUALCOMM Inc
AXP American Express Co
HON Honeywell International Inc
BRK.B Berkshire Hathaway Inc
MO Altria Group Inc
JNJ Johnson and Johnson

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