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).

XLY Consumer Discretionary Sector SPDR Fund
XLB Materials Select Sector SPDR Fund
XLI Industrial Select Sector SPDR Fund
XLV Health Care 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
USB US Bancorp
LMT Lockheed Martin Corp
XOM Exxon Mobil Corp
BA The Boeing Co
MA MasterCard Inc
NSC Norfolk Southern Corp
MDT Medtronic Inc
TXN Texas Instruments Inc
BMY Bristol-Myers Squibb Company
MMM 3M Company
GE General Electric Co
ORCL Oracle Corporation
BAX Baxter International Inc
UTX United Technologies Corp

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.