REMX Rare Earth Minerals ETF Weekly Chart; H&S; Downward-Sloping and Sideways Channels; Falling Wedge

REMX is a rare earth minerals ETF. Like all other commodities, 2018 was a soggy year with charts moving from the upper left to the lower right. Gold, silver, copper, oil, lithium, graphite, you name it, all these plays fell apart last year creating a deflationary vibe. After the Federal Reserve and other global central bankers colluded to save the markets as this year began, commodities such as gold, silver, copper to some extent, and oil recover. Lithium and other rare earth minerals, however, do not recover.

The rare earth minerals such as scandium, yttrium, lithium and cobalt are used in smartphones and other electric and energy applications; they are strategic commodities. Nearly 90% of the rare earth production comes from China. It was by design that President Xi visited a Chinese rare earth processing facility last week. Xi is sending a subtle message to President Trump that the access to rare earth minerals may be shut off if the US-China trade war escalates.

On the Xi news, investors flock to the rare earth minerals looking for plays. Traders buy REMX with both fists last week creating a big +7% pop. The volume is a huge blowout. Comically, the REMX ETF fund contains Chinese rare earth companies. The sales will drop if China cuts off access to Western nations. In trade wars and protectionism, all nations slit each other's throats like the 1930's. Joe Retail, that got all excited about rare earths, is unknowingly swimming in a pool of sharks. Professional traders are taking advantage of the hype.

REMX was joyous in 2017. It was one big par-tay. However, the H&S (head and shoulders) pattern formed in late 2017 and early 2018 and down she goes. The head at 29.2-ish and neckline at 23.5-ish is a 5.7 difference so the downside target is 17.8 once the neckline failed, and it occurs.

Price bounces to begin the year on the universal positive divergence (green lines) across all chart indicators. The oversold conditions and falling green wedge also provide oomph to take price higher so a multi-week rally occurs. REMX rolls over during the last month as the US-China trade negotiations fall apart and then last week the big up move occurs. Price will likely chop sideways. There is nothing here to play either way especially while Emperor Xi and King Trump are playing their daily trade games. Maybe if price drops to 12-13 level and holds that level, REMX will be worth taking a shot on the long side. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.