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
XLK Technology Select Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLV Health Care 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
NSC Norfolk Southern Corp
CVX Chevron Corp
XOM Exxon Mobil Corp
UTX United Technologies Corp
TXN Texas Instruments Inc
USB US Bancorp
EMR Emerson Electric Co
SLB Schlumberger Ltd
TGT Target Corporation
V Visa Inc

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.