Dig This: UltraShort Oil & Gas ProShares
by Sam Collins 10/03/08
UltraShort Oil & Gas ProShares (DUG) -- This Exchange-Traded Fund (ETF) seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index.
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When a huge bull-market spike in July drove crude oil and other energy commodities to new highs, this ETF fell to new lows but within six weeks established a quadruple-bottom with four Collins Bollinger Reversal (CBR) buy signals.
Since then, oil has fallen and DUG has risen, flashing one positive signal after another: Note the 'gold cross' (a 50-day moving average over a 200-day moving average) in September, a stochastic buy last week, along with one of our own CBR buys.
This chart has a near-term price object of $55 with much higher prices likely.
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The market will eventually break to new highs, but it will likely remain within the current narrow zone of support for several more months.
An 'Ultra' Risky Bet on the Financials
If you have the stomach for a high-risk trade that could pay out big, now is the time to buy the ProShares Ultra Financials (UYG).
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If technology and financial stocks can break through major technical resistance, the market could continue to go up for several more days.
News from Cisco (CSCO) has boosted Research In Motion (RIMM), and it may be time for investors to load up on the stock.
Mutual funds have been burning through cash at the fastest pace in 18 years, and it looks like the market is about to run out of gas.
