• SPX Monitoring purposes: Sold long SPX on Dec. 21, 2020 at 3694.90 = gain 1.3%; long Dec. 14, 2020 at 3647.49.
• Monitoring purposes Gold: Long GDX on Oct. 9, 2020 at 40.78. 
• Long-Term SPX monitor purposes: Long SPX on Dec. 26, 2020 at 3400.97.

The pattern forming on SPY appears to be the “Three drives to Top." This pattern has a downside target from where the pattern began, which is near the 362 range. Today SPY closed at the previous high of Dec. 18, 2020 on reduced volume and a bearish sign. 

Yesterday we said, “The tick closed at -472 and in a panic level, suggesting a bottom is not far off. The Arms Index closed at .87, which is neutral. With the tick reading in a panic level, could see bounce tomorrow but should find resistance near the previous high of 372 on the SPY.” A bullish setup could form near the 362 SPY in the coming days. The SPX may remain neutral for short-term and bullish for the intermediate-term.

We have updated this chart which illustrates the weekly GDXJ. We pointed out in the past that the GDXJ was on strong support near the 50.00, which is where a trend line sits that dates back to 2013. GDXJ has since bounced off support and has rallied. The weekly RSI is back above 50 and bullish. The bottom window is the GDXJ/GLD ratio, which did find support near .30 and has turned up -- another bullish sign.

A possible upside target for GDXJ is the late 2012 high near the 90.00 range. In this bull run for gold, gold stocks should outperform gold itself, and silver stocks should outperform silver itself. One step further, silver stocks should outperform gold stocks. For potential maximum performance, silver stocks may be the place to be.

Above is the monthly chart of Endeavour Silver Corp. (EXK) going back to 2010. This chart broke above a seven-year trend line in December and closed above that trend line, suggesting a valid breakout. Notice that the monthly RSI is higher now than back in 2016 even though EXK is lower, which is a bullish divergence.

Volume increases also help to confirm the breakout. There are similar patterns forming on DOLLF, ISVLF, and SSVFF, which are also silver stocks. The SILJ is outperforming GDXJ, showing junior silver stocks are outperforming junior gold stocks.