Today's new low -- and upside reversal -- in the ProShares UltraShort Oil & Gas ETF (DUG) has the right pattern "look" and the necessary acute oversold conditions reflective of a seriously overbought oil and gas equity sector in the S&P 500 -- and one that is overdue for a meaningful bout of profit-taking.

We are bullish on DUG, taking a contrary near-term view of the commodity sector, in general, and the oil and gas sector, in particular, during the days immediately ahead.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.