Today in the market, Monday, December 29, 2008: Stocks slid on Monday after Kuwait pulled out of a joint venture with Dow Chemical due to the deepening global recession, threatening Dow's planned takeover of Rohm & Haas.
Rising energy shares tempered losses after oil prices CLc1 rose 6 percent following Israeli air strikes in the Gaza Strip. The third day of fighting came as Israel prepared to launch a possible invasion.
Dow Chemical shares tumbled to their lowest level since 1991 after Kuwait decided to end the planned $17.4 billion joint venture, citing slumping petrochemical sales and the global financial crisis.
The news raised concerns that Dow, the largest U.S. chemical company, would not be able to complete its deal to buy rival Rohm & Haas, which Dow had agreed to acquire for about $15.3 billion in July. Rohm & Haas shares fell as much as 25 percent.
The declines were exacerbated by light volume, analysts said. Trading is expected to be light throughout the week, abbreviated by the New Year's holiday on Thursday. (headline & commentary courtesy of Reuters)
ETF/CEF Discussion: A down day, light volume all cause RSI to punt today. So there isn’t a lot for me to talk about today, so I want to talk about the market bottom.
This morning I listened to a great podcast from Russell Napier, Author "Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms" Russell has done a comprehensive study of the four major economic/financial bear market bottoms which is presented in his book. The following site has an interview from April 2006 where he discusses the results of his analysis.
http://www.financialsense.com/Experts/2006/Napier.html
I really think it is quite instructive to review Russell's findings, since we are in the depths of a major bear. Please remember that four data points are a statistically sparse data set. This is one book that I will read.
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