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).

XLY Consumer Discretionary Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLP Consumer Staples Sector SPDR Fund
XLV Health Care Select Sector SPDR Fund
XLU Utilities Select Sector SPDR Fund

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

TXN Texas Instruments Inc
QCOM QUALCOMM Inc
MDT Medtronic Inc
RTN Raytheon Co
PFE Pfizer Inc
AEP American Elec Pwr Co Inc
UNP Union Pacific Corp
LLY Eli Lilly and Co
USB US Bancorp
NSC Norfolk Southern Corp
BHI Baker Hughes Inc
LMT Lockheed Martin Corp
BAX Baxter International Inc
SO Southern Co
HNZ HJ Heinz Company
ABT Abbott Laboratories
UPS United Parcel Service Inc
CL Colgate Palmolive Co
NWSA News Corp
AMGN Amgen Inc
GILD Gilead Sciences Inc
JNJ Johnson and Johnson
MSFT Microsoft Corp
MA MasterCard Inc
HAL Halliburton Co

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