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
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).

HON Honeywell International Inc
UNP Union Pacific Corp
FCX Freeport-McMoRan Copper & Gold Inc
NSC Norfolk Southern Corp
IBM International Business Machines Corp
GE General Electric Co
MON Monsanto Co

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.