According to a report by Bloomberg, cattle prices may rise 13% by the end of the year on the Chicago Mercantile Exchange and Brazil’s Bolsa de Mercadorias e Futuros. More from this story:

Not since 1996, when corn reached what was then a record $5 a bushel, have cattle been this cheap relative to their primary source of feed. Cattle are the seventh-worst performer of the 26-member UBS Bloomberg Constant Maturity Commodity Index in the past year, a time when soybeans, oil and copper jumped to records. After adjusting for inflation, cattle are down 27 percent from their 1988 peak.

“It’s pretty certain that we’ll see a decline in domestic supply in the U.S.,” Joesley Batista, chief executive officer of JBS SA, the world’s biggest beef producer, told reporters in Sao Paulo on May 15. “As a result, we’ll have price hikes and improved margins.”

Production also is dropping or failing to keep pace with demand in China, Brazil and the European Union, mostly for grain-fed beef, analysts and government data show.

“We expect meat prices, especially beef prices, to rise this year,” said Peter Weeks, chief economist at Meat & Livestock Australia, a trade group in Sydney. “We’ve already seen big increases in beef prices in China, Russia, India and throughout Southeast Asia.”

Now is a great time to invest in a livestock ETF, says Ian Davis in The Growth Stock Wire. And hog prices are set for a similar upswing to cattle prices.

“Hog farmers are not running charities. When the input costs for hog producers soar, the price of hogs must also rise. By buying hogs, we are piggybacking (excuse the pun) on the uptrend in agriculture and crude oil.

“So when the uptrend finally begins, how should we play it?

Read on how to profit when this upswing kicks in with this livestock ETF.

“When the gold price rises, jewelry gets more expensive,” says Tom Dyson in DailyWealth. It’s the same way with farm animals. When the corn price rises, livestock must get more expensive. Corn has doubled in the past 18 months, but livestock prices are still in the same range they were six years ago. They will catch up with corn.”

Tom also recommends that his readers invest in a livestock ETF.

“Two trade in London under the symbols CATL.L and HOGS.L,” says Tom. “They track the Dow Jones AIG sub-indexes for live cattle and hogs.”

Buyer’s remorse is the feeling of regret you get when you realize you just did something dumb. Like forking over an extra $10,000 for the dual turbo model that performed so well on the test drive, but doesn’t make a difference in bumper-to-bumper traffic… Or paying top dollar for the newest square-head driver that was so forgiving on the driving range, but plays the same as your old driver on the golf course… Or… well, you get the idea.

By this time next month, oil stock buyers will feel the same way.

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Let me explain…

Oil is on an amazing run. It’s headed even higher over time. And oil stocks will be the big beneficiaries.

But if there’s one thing I’ve learned in all my years of trading, it’s this: If all the talking heads on CNBC, and all my buddies, and my wife, and my father-in-law, and my mother are talking about the same thing, then it’s time to sell.

It’s time to sell oil stocks.

I know that’s the dumbest thing you’ve heard all year. And I know the Growth Stock Wire feedback e-mail box is about to get filled with all sorts of comments about how “Jeff must be drinking again.” But stay with me for a moment…

Take a look at the following chart of the Bullish Percent Index for the oil sector…

The Bullish Percent Index is a measure of how many stocks in a sector are in bullish patterns. As you can see, yesterday, the oil sector BPENER closed over 91. In other words, more than 91% of the stocks in the oil sector are running higher.

This chart cannot go over 100, and it rarely goes above 90. When it gets this high, it’s almost always followed by a dramatic decline in the price of oil stocks. (Take a look at what happened to oil stocks back in January… or in July and August of last year.)

Even more important is the negative divergence in the Moving Average Convergence Divergence indicator (MACD). The MACD measures the strength of any move. If a rally is strong, then the MACD makes new highs along with the stocks. If a rally is weak, then the MACD forms a lower high and signals the potential for a change in trend.

The recent rally in oil stocks is weak.

I’m bullish on oil and oil stocks over the long term. Heck, if T. Boone Pickens says oil is going to $150 per barrel this year, then who am I to argue?

But in the short term, oil stocks are susceptible to one heck of a pullback. And if you’re looking to buy into the sector, then you’ll have a much better opportunity one month from now.

Best regards and good trading,

Jeff Clark

Source: The Boldest Prediction I’ll Make This Year

If the stock acts well, then investors can look forward to strength in the market. And if MER shares struggle, then weakness lies ahead.

I’ve probably made more money trading off the short-term action in Merrill Lynch shares than in any other single technical indicator. So, at least for me, the canary pulls a lot of weight.

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Right now, MER is struggling.

Take a look at the following chart, which compares the four-day action in MER with that of the S&P 500…

You can clearly see MER shares have been underperforming the overall stock market… MER is trading higher but is lagging the S&P.

Understand, this isn’t a sign of impending doom. But it is a sign that the market may have a tough time holding on to any further gains. We may see a fairly swift downside move kick off soon.

Friday is option-expiration day, which adds in the potential for volatility. Since we’ve rallied so strongly so far this week, we may be ready for a countermove. Add in the increasingly bullish sentiment among investment advisors (which is best used as a contrary indicator), and we have a pretty compelling case against getting too aggressive on the long side.

In fact, taking a few profits off the long side and making a few short-side bets seems like the best thing to do right now.

Don’t sell your entire portfolio. But you’ve seen some terrific gains since March 27, when I suggested it was time to buy. Judging by the canary, now is a good time to lock in those gains.

Best regards and good trading,

Jeff Clark

Source: The No. 1 Reason to Take Profits Now