Bottom Line: The AI Top is in place, but without price follow-through to the downside, it's too early to be aggressively short. It may take days, weeks or months, but that time is coming, For now, this interesting speculation has made itself known and it doesn't require political convictions to participate. Digital World Acquisition Corp (DWAC) Call this a long shot, but without being political about it, this Special Purpose Acquisition Company offering may be the story of the election year. Click each of these two links below for details: Donald Trump just got the green light to return to Wall Street Truth Social Worth = $4 Billion In other words, love him or hate him, this is an option opportunity where puts/calls can go up 10X+ between now and the November election. I am not advocating either way just yet, but I am bringing DWAC to every option trader's attention because of the potential in both directions. Best case is the half of the country that voted for Trump in 2024 decides they want in and these shares soar in the months ahead. Think NVDA a year ago, under $200 (recently $800).Worst case, the gathering political storm works against anything Trump-related in the lead up to the election, driving these shares back down to intrinsic value < $10. Either one of these scenarios becomes an option lottery ticket and in fact, owning both a put and a call, either of which goes up 10X or 20X depending on outcomes, becomes the pairs trade of this election year, where worst case is that nothing dramatic happens to the Trump candidacy in the months to come. How likely is that? DWAC - Daily Trend Model Currently on a Buy Signal from November, 2023 @ $16. Potential market = 74 million ("more or less") Trump voters crowding into these shares if and when Truth Social goes public. Downside is it returns from whence it came, back below $20 if and when anti-Trump forces align to take down the company. Note: Special Shareholders Meeting March 22nd, ergo: Apr options. DWAC - Fibonacci & EW Extensions: Bull Case - A fresh leg up to $140-180 possible The South Carolina primary is Saturday. A big up day on Monday for DWAC makes this EW/Fib projection something to think about going forward, especially with the scheduled March 22nd shareholder vote to take Truth Social public. DWAC can run as high as $180-200 or as low as $10-15 in 2024's political theatre. If DWAC gaps up on Monday we will take a serious look at these calls. For now, they remain a curiosity, (unless anyone is feeling particularly frisky). DWAC went public in 2021 @ $10/share. Huge spreads between bid and ask are typical for meme stocks, but those spreads will come done as news of this merger and the effect of the election manifests on DWAC's value, particularly as it becomes fodder for daily political commentary. I have only been following these options for a couple of days, so let's see how they trade before evaluating the opportunity. Essentially, the shares could soar, or crumble and it would be nice to have a stake in whichever side prevails, without having to take sides in the election. TSLA - Still on Intermediate Term Sell of Jan 5th. This is the Daily, i.e., Intermediate Term, Trading Model. The Short-Term Trading Model (not shown) triggered Long on Thursday, but it will take a close above $200 to confirm the Long trade. A close back below $190 makes this Short-Term "Buy Pending" questionable. In other words, TSLA below $200 is not actionable for either model.
