Bullish Case: With the upcoming U.S. presidential elections expected to boost market stability, EWG could rise past $34. Historical patterns indicate favorable returns for EWG over 1-2 years, coupled with a bullish sentiment visible in option trends and implied volatility falling below a critical threshold.

Bearish Case: Ongoing market uncertainties and potential economic downturns in Europe might trigger a price drop to $28. High put volumes reflect market fears, exacerbated by elevated implied volatility suggesting further downside risks.

Potential Outcomes:

1) 25% chance of price rebound to $34;

2) 40% chance of decline to $28 amid economic fears;

3) 35% chance of range-bound trading around $31 as market stabilizes post-elections.

Trading Oracle: Consider executing a bullish debit spread using EWG 01/17/2025 35.00 C and 30.00 C options. This approach targets a substantial upside while capping risk, aiming for a 20-30% profit on a $2 entry. Adjust for volatility shifts to maximize gains.

October 27, 2024