On the balance of probabilities this is a completed A down, irregular B up and C has just started. Normally the C should take the stock below the low of A, that is $45. The surprise here was that the A leg took slightly more than a year and the B leg slightly less than 5 years. Otherwise there are no surprises and if this stock continues to perform in accordance with EW rules the low should occur sometime in 2016. Time will tell.
Here is the last leg C up in more detail;
Procter & Gamble is cutting its outlook, and its stock buy-back plan. These guys are the world’s marketers par excellence. What is not clear is whether or not that is a compliment. In 1973 I applied for a job at their European headquarters which were then in Geneva. They spared me the agony if becoming a salesman by rejecting my application, making it clear that salesmanship was not, by a long shot, my trump card. Instead I should have borrowed a truckload of money and bought the stock which would have earned me more than actually working a lifetime.
Today the stock should be sold! There is little doubt that there is a 5-wave sequence up from the lows (this is even clearer on a semi-log chart, see below). The first target would be the channel line at about $53, next is $45 and then $40. The best target overall is at $29 (4th of p.d. and 62%). All of this even in an ongoing bull market in the event that we are presently in a 4th wave of a higher degree than shown. Colgate-Palmolive may at long last go in the same direction having topped $100.
For those so inclined, there appears to be a pairs trade here. Sell Colgate and buy P&G, 2 to 3; the spread has never been larger. However if the starting point of the chart is brought forward the spread is reduced significantly.
