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
XLY Consumer Discretionary Sector SPDR Fund
XLF Financial Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLK Technology Select Sector SPDR Fund

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

SLB Schlumberger Ltd
MA MasterCard Inc
COST Costco Wholesale Corporation
HPQ Hewlett-Packard Co
MMM 3M Company
NSC Norfolk Southern Corp
CMCSA Comcast Corp
NKE Nike Inc
SPG Simon Property Group Inc
HD Home Depot Inc
DOW Dow Chemical Co

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.