There's next to no chance they get past Luigi/Waluigi. Red flopped pretty damn hard last year, even if placement in a rivalry somehow improves him a lot, it's very unlikely that it's enough to get him past something with legit strength like Luigi/Waluigi.
If they manage to get to the 3rd round it'll be partially because of Luigi/Waluigi being weak and Ryu/Ken will get past the trainers without much trouble.
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[NO BARKLEY NO PEACE]