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).

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

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

C Citigroup Inc
MS Morgan Stanley
GS Goldman Sachs Group Inc
JNJ Johnson and Johnson
BK The Bank of New York Mellon Corp
AEP American Elec Pwr Co Inc
DOW Dow Chemical Co
BAC Bank of America Corp
QCOM QUALCOMM Inc
HON Honeywell International Inc
IBM International Business Machines Corp
APC Anadarko Petroleum Corp
ORCL Oracle Corporation
BAX Baxter International Inc
EMR Emerson Electric Co

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.