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This paper presents a high resolution direction-of-arrival (DOA) algorithm which can effectively estimate highly correlated multiple signals in the presence of correlated antenna array noises at the receiver. The proposed algorithm in this paper is obtained by combining the forward/backward spatial smoothing algorithm that is an improved spatial smoothing scheme with the second-order technique which is known as an effective DOA algorithm to resolve very closely spaced multiple signals in the presence of correlated antenna noises. Analysis has been made in several aspects to compare the performance between the spatial smoothing, the spatially smoothed second-order, and the proposed algorithms in DOA estimation. Computer simulations are statistically performed to show the usefulness of the analysis.