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
XLI Industrial Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

DD E I du Pont de Nemours and Co
MS Morgan Stanley
DVN Devon Energy Corp
UPS United Parcel Service Inc
IBM International Business Machines Corp
GS Goldman Sachs Group Inc
APC Anadarko Petroleum Corp
COF Capital One Financial Corp
CAT Caterpillar Inc
GILD Gilead Sciences Inc
DOW Dow Chemical Co
UNP Union Pacific Corp
UTX United Technologies Corp
SPG Simon Property Group Inc
RTN Raytheon Co
BAC Bank of America Corp

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.