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
XLV Health Care Select Sector SPDR Fund
XLE Energy Select Sector SPDR Fund
XLY Consumer Discretionary Sector SPDR Fund
XLB Materials Select Sector SPDR Fund

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

CL Colgate Palmolive Co
CVX Chevron Corp
XOM Exxon Mobil Corp
AXP American Express Co
ALL Allstate Corp
KO The Coca Cola Co
SLB Schlumberger Ltd
JPM JPMorgan Chase & Co
USB US Bancorp
WFC Wells Fargo & Company

Dave Mecklenburg is the Publisher of TigerSharkTrading.com.