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).

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

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

CAT Caterpillar Inc
UNP Union Pacific Corp
C Citigroup Inc
FCX Freeport-McMoRan Copper & Gold Inc
JPM JPMorgan Chase & Co
ALL Allstate Corp
XOM Exxon Mobil Corp
MDT Medtronic Inc
HD Home Depot Inc
INTC Intel Corp
MS Morgan Stanley
GE General Electric Co
QCOM QUALCOMM Inc
BRK.B Berkshire Hathaway Inc
F Ford Motor Co
VZ Verizon Communications Inc

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.