I don't know how the latest twist in the Trump drama will end. The president finds himself without a lot of friends in Washington D.C. in recent days.
But here is one thing I do know: There is one person who, as unlikely as it would have seemed only a few short months ago, must be praying for Trump to remain in power. And that person is Tesla (TSLA) CEO Elon Musk.
Long or short, Tesla investor prudence dictates that we have to examine a scenario where were President Trump turns into President Pence. This scenario analysis will be crucial for how to trade this stock in the coming days, weeks and perhaps months.
To understand why, we have to backtrack to the morning of Nov. 9, 2016, and what has transpired since. In the immediate aftermath of the election, Tesla stock traded down based on Trump assembling a cabinet that included Environmental Protection Agency head Scott Pruitt and Steve Bannon as White House Chief Strategist.
So, the initial reaction to the election results was not good for Tesla, given the early advisor and cabinet talk. The market assumed a hard line on all things subsidies and preferences for selling one product over another.
But then in early-mid December 2016, something happened.
Al Gore paid a visit to Trump Tower, and venture capitalist Peter Thiel pulled together a boardroom with tech executives that included Elon Musk. Soon thereafter, Goldman Sachs' (GS) Gary Cohn established himself as Trump's reliable Wall Street right hand. Cohn seems to view Elon Musk in the most favorable light as far as the Trump administration goes.