Yo Pit Crazies!

China just reminded us why rare earth minerals are their oil, and why every American investor should be paying attention. When President Xi frames it this way, he’s not making a comparison. He’s making a threat.

Trump fired back with a pointed Twitter message, and what started as a trade spat just became a strategic chess match with your portfolio in the crossfire.

How China Cornered a Market Worth Trillions

China didn’t just stumble into rare earth dominance. They bought the technology, shipped it back to China, and conducted all mining and production there. Smart? Absolutely. Dangerous for us? You bet.

As Frank Gregory broke down in Thursday’s State of the Market, China essentially created a chokehold on materials that power everything from smartphones to missile guidance systems. They control both the raw materials AND the finished product manufacturing. That’s the real problem.

The U.S. response? We’re finally building domestic supply chains. The regulatory logjam that’s strangled mining companies for decades is starting to break loose, and we’re watching it happen in real time with companies like:

• US Rare Earth (USAR) – closed another win here Friday
• Perpetua Resources (PPTA)
• Mountain Pass (MP)

What the VIX Is Really Telling Us About This Fight

Here’s where it gets interesting for traders. The market can now properly price this worry, and I’m using the VIX to measure how big this spark really is.

The VIX is above October levels and flat out to the outer months. When the curve gets this flat – sometimes as little as $1.00 between near-term and far-term contracts – the market is genuinely uncertain about what comes next.

What this means: The flatter the VIX curve, the more uncertain the market is about volatility’s future direction. As of Friday, nobody knows if this is a one-day dust-up or the opening shot of something much bigger.

We’ve had elevated VIX for weeks – first waiting for the government shutdown, then the Israel-Hamas situation (which appears peacefully concluded). But even as markets hit all-time highs, that shutdown threat kept volatility elevated.

Now this rare earth dispute is like throwing a spark on gasoline.

My Trading Outlook: Uncertainty Creates Opportunity

This uncertainty is exactly what I’ve been waiting for. It’s going to give me a better entry point for my MAHA (Make America Healthy Again) agenda on Tuesday.

If this rare earth dispute escalates – and China decides to flex their “oil” muscle – the MAHA agenda becomes even more attractive. Domestic production, supply chain independence, strategic materials… this is the exact scenario that makes reshoring plays look brilliant.

The market doesn’t know whether to panic or shrug this off. That indecision? That’s where opportunity lives. 

To Your Trading Success,

AG