DUG has dropped to the 78.6% Fibonacci retracement level of the move from the 10/21/09 low to the 11/3/09 high. The next couple of days will be critical for this fund. New recovery highs or new lows will be determined very soon. If a change in trend is taking place, the price must move higher through the 11/4/09 high. If I have the wave count correct, the 11/4/09 high is the b wave of the wave 2 correction. Elliott Wave rules do not allow wave two to retrace more than 100% of wave one. There could potentially be two consecutive waves one and two down from the 11/3/09 high. However, if the price breaks above the 11/4/09 high, then we can eliminate the potential for lower lows, meaning the trend is up. The break of the 11/4/09 high will indicate that wave two is complete and wave three is under way with price breaking into higher highs. I have put Elliott Wave count labels on a 60-min chart to show the potential labeling of the wave pattern. You will see that I have labeled waves i, ii, iii, and iv from the 11/11/09 low. The price must break higher Monday for this interpretation to have any standing at all. The price is still hanging around inside the TAZ on the daily chart. If price breaks out to the upside as mentioned, it should push the price above the 55 EMA indicating the change in trend. It will be most special if the price can break out above the 11/3/09 high. Volume has been light of late. Expect the volume to pick up significantly if the price breaks out in wave three up. I have been on the sideline with the Oil and Gas Funds. That is changing. I recommend taking a position in DUG if price breaks the 11/4/09 high. A more conservative trade will be taking a position if price breaks the 11/3/09 high. Put the stop loss just under the low of 11/11/09.