Archive for the ‘Chart School’ Category

2-0 Bulls

Courtesy of Declan.

A second day for bulls to shine despite modest end-of-day gains. Some indices did better than others. The Russell 2000 was the key performer. It finished with a MACD trigger ‘buy’ and looks ready to outperform the Nasdaq 100.  This is an important development for bulls looking for more from other indices. A move to challenge – then break – its 200-day MA, would convert August-November action into a healthy basing action.

The Nasdaq registered higher volume accumulation as a brief sojourn below the 20-day MA was reversed. It’s nicely set up for a push to new swing highs.

The S&P lost the most ground intraday, but managed to close positive by the close of business. It did clock a relative loss against the Russell 2000. The MACD hasn’t yet triggered a ‘buy, but is close to doing so.

The Semiconductor Index finished with a bullish engulfing pattern and is continuing to build a solid base. Long term prospects look good, especially as weak copper prices will eventually bring its reward.

For tomorrow, look for bulls to try and make it 3-0.

You’ve now read my opinion, next read Douglas’ and Jani’s.

RTT browsing latest..

Courtesy of Read the Ticker.

rtt-browsing-latestPlease review a collection of WWW browsing results.

Date Found: Wednesday, 04 November 2015, 12:32:23 PM

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Comment: Stanley Druckenmiller : The greatest hedge fund manager of all time is now operating under the assumption that a primary bear market began in July. Due to the massive misallocation of capital in recent years and the long-term demographic headwind going forward, normal investors should probably be in cash.

Date Found: Wednesday, 04 November 2015, 07:36:15 PM

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Comment: Charles Hugh-Smith of OfTwoMinds blog – This may well be the most important chart you’ve never seen. Courtesy of longtime analyst-correspondent B.C., this chart reveals that real per capita tax receipts have reliably top-ticked the stock market since 1973.

Date Found: Thursday, 05 November 2015, 03:32:14 PM

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Comment: This is a story that began when The Fed unleashed the $85bn per month QE3.

Date Found: Friday, 06 November 2015, 01:47:11 AM

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Date Found: Friday, 06 November 2015, 08:27:55 PM

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Comment: Jim Rickards: Recession will force Fed to ease in 2016

Date Found: Saturday, 07 November 2015, 12:35:08 PM

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Comment: FACT: a 1% increase in interest rates would increase the interest on the National Debt from $400 billion per year to $600 billion per year, a 50% increase. RTT My bet if rates are raised by the FED it will be at a rate of 0.125% per time , or 0.25% one and done!

Date Found: Tuesday, 10 November 2015, 12:07:35 PM

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Comment: “Historically, the stock and bond markets have done much better when the labor unemployment rate is above 5%…
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Sellers Fail To Break Bulls Resolve

Courtesy of Declan.

Modest losses on the day, but bears were unable to press declines. Volume was down considerably, which given the week that’s in it is not surprising. The Nasdaq finished with a ‘sell’ trigger in On-Balance-Volume.

The S&P closed with a spinning top, but didn’t lose its 20-day MA. There was a relative loss against the Russell 2000, which given the latter’s action over the last couple of months is really more bullish for the broader rally.

The reason for the relative change in the S&P to the Russell 2000 was the end-of-day gain in the Russell 2000. A move above 1,199 is needed to comfort bulls but today’s action will have helped towards this goal.

The Nasdaq 100 finished with a doji, just shy of negating the ‘bull trap’. Still waiting for the MACD trigger ‘buy’, which will either lead the breakout, or happen because of it.  Shorts will need to be nimble.

For tomorrow, things will likely remain quiet as Thanksgiving approaches. Don’t be surprised if there is a low volume breakout in the Nasdaq 100. It would be the kind of action not unusual for a Black Friday.

You’ve now read my opinion, next read Douglas’ and Jani’s.

Modest Gains

Courtesy of Declan.

Friday was a low key affair. Small gains managed to rank as accumulation for the S&P, Dow Jones and Nasdaq 100, but there could be an argument for profit taking too.

The S&P remains above 20-day and 200-day MAs. Friday did finish with a small spike high but there is demand to quickly pull up on any weakness which may be delivered on Monday.

The Russell 2000 did manage a gain, but because of its relative underperformance and its position below its 200-day MA, bulls will need to do more if money is to rotate back to Small Caps. It’s the only real weakness of the October rally that Small Caps haven’t participated to the same degree as Large Caps or Tech indices.

Shorts may again go looking to the Nasdaq 100. Friday saw a doji just below resistance. However, the index has been here before and has punished shorts. Friday’s accumulation reversed the ‘sell’ trigger in On-Balance-Volume and the MACD is working towards a strong ‘buy’ signal. While bears might have the easier play on Monday, things are well set for a powerful bullish breakout – likely fueled by shorts scrambling.

The Semiconductor Index should be used as a guide for the Nasdaq and Nasdaq 100, This index continued to trade below its 200-day MA, and finished with an indecisive doji. A confident push above the nearby 200-day MA may be the cue to bring the breakout in the Nasdaq 100.

As we approach months end, the VXN is on course to finish with a doji and set up for a more volatile December. This would run contrary to the seasonal bullish set up for a ‘Santa Rally’. The month isn’t over yet, but this is something to watch.

For Monday, shorts may try (yet again) for the Nasdaq 100, but they may want to wait for the Semiconductor index to weaken before attacking.  Bulls can watch the same Nasdaq 100, particularly if it gets above Friday’s high.

You’ve now read my opinion, next read Douglas’ and Jani’s.

Market comments that will interest you

Courtesy of Read the Ticker.

market-comments-that-will-interest-youA few points to consider! How long can the bull fire burn! One day the coal runs out!

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NOTE: does allow users to load objects and text on charts, however some annotations are by a free third party image tool named

Investing Quote…

…”I was brutal in self-analysis. He told his sons his conclusions: “Successful trading is always an emotional battle for the speculator, not an intelligent battle.”…He knew that his biggest enemy was his own emotions.”…

Jesse Livermore

..“One must search through a maze of complex and contradictory details to get to the significant facts … Then he must be able to operate coldly, clearly, and skilfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right”…

Bernard Baruch

..”Markets are designed to allow individuals to look after their private needs and to pursue profit. It’s really a great invention and I wouldn’t under-estimate the value of that, but they’re not designed to take care of social needs”..

George Soros

..”Money couldn’t buy friends, but you got a better class of enemy”..

Spike Milligan

..”The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”..

George Soros

Using Elliott Waves: As Simple As A-B-C


Using Elliott Waves: As Simple As A-B-C 

Two resources from Elliott Wave International can help you get started

By Elliott Wave International

When Ralph Nelson Elliott discovered the Wave Principle nearly 70 years ago, he explained how social (or crowd) behavior trends and reverses in recognizable patterns. You can learn to identify these patterns as they unfold in the financial markets, and use them to help anticipate where prices will go next. Elliott Wave International has developed a free comprehensive online course — The Elliott Wave Tutorial: The 10 Lessons now -- which describes these patterns and explains how they relate to one another.

To use the Wave Principle as you analyze the markets, you need a basic understanding of the Elliott method — the rules and guidelines, the literal shape of individual waves, even when the larger trend may turn.

To get you started, we've included an excerpt from the Elliott Wave Tutorial, adapted from Elliott Wave Principle by Frost and Prechter, and a short video clip from the live presentation, Tips from a Pro.

Here is your quick lesson excerpted from The Elliott Wave Tutorial:

In his 1938 book, The Wave Principle, and again in a series of articles published in 1939 by Financial World magazine, R.N. Elliott pointed out that the stock market unfolds according to a basic rhythm or pattern of five waves up and three waves down to form a complete cycle of eight waves. The pattern of five waves up followed by three waves down is depicted in Figure 1-2.

One complete cycle consisting of eight waves, then, is made up of two distinct phases, the motive phase (also called a "five"), whose subwaves are denoted by numbers, and the corrective phase (also called a "three"), whose subwaves are denoted by letters. The sequence a, b, c corrects the sequence 1, 2, 3, 4, 5 in Figure 1-2.

At the terminus of the eight-wave cycle shown in Figure 1-2 begins a second similar cycle of five upward waves followed by three downward waves. A third advance then develops, also consisting of five waves up. This third advance completes a five wave movement of one degree larger than the waves of which it is composed.

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Minor Losses Across Markets

Courtesy of Declan.

No follow through, but healthy action saw markets hang on to yesterday’s gains. Volume declined to keep sellers at bay.

The S&P is still working off a ‘sell’ trigger in the MACD and On-Balance-Volume.  However, the index remains above 20-day and 200-day MAs.

It was a similar story for the Nasdaq with ‘sell’ triggers in On-Balance-Volume and the MACD.  On-Balance-Volume is on the verge of a ‘buy’ trigger.

The Russell 2000 lost the most ground on the day, but it remains above the 50-day MA. The relative performance against the Nasdaq continued to lose ground, which isn’t so good.  The broader market needs Small Caps participation to drive long term gains.  A push above 1,200 is needed sooner rather than later.

Today offered a weak start, but this didn’t develop into broader weakness. Tomorrow offers a good chance to push on and to further squeeze shorts.

You’ve now read my opinion, next read Douglas’ and Jani’s.

Bulls Negate Bearish Doji

Courtesy of Declan.

A very good day for bulls say yesterday’s weakness blown away in decisive fashion. Volume climbed to register an accumulation day for the indices.

The best of the action belonged to the Nasdaq 100. It gained nearly 2% in a move to challenge the ‘bull trap’. It hasn’t done so yet, but tomorrow could be the day new highs are posted for 2015. Today’s gains came with a ‘bull cross’ in On-Balance-Volume.

The Dow regained the 200-day MA and added to the uptick in On-Balance-Volume, but it lost out in relative performance against Tech indices.  After a period of out-performance, the Dow has spent the latter part of 2015 struggling to match the returns of other indices.

On the flip side, the S&P has had a better time in matching returns of its peers. The index is outperforming Small Caps, but still has a way to go to make new highs for the year.

The Russell 2000 also performed well, firming up 50-day MA support.  The index hasn’t yet reversed its relative performance decline, but more days like today will help.

Tonorrow may see some of today’s gains reverse, but whatever bearishness generated by yesterday’s action, was neatly undone by the strong performance of markets today. Dip buyers look to be at work here.

You’ve now read my opinion, next read Douglas’ and Jani’s.

Major Market Index Fails Key Test

Courtesy of Dana Lyons

The blue chip Major Market Index failed to recapture a key breakdown level.

This post is about 2 weeks late, but still very pertinent in its message. We’ve written about the Major Market Index (XMI) on a couple occasions. Not widely followed, the XMI is an index of 20 of some of the largest blue chip industrial stocks in the U.S. market. While not a very broad index, it is influential, in terms of its constituents’ “name” recognition as well as their “weighty” impact on many of the averages.

The last time we posted something on the XMI was in June, taking note of a couple not-so-constructive developments on its chart. These would, of course, be a precursor to much greater weakness in the August-September decline. One of the key junctures during that period was the index’s early-August breakdown below its post-2009 UP trendline. That breakdown opened the gates to the steep losses later in the month.

Recently, amid the sharp post-September rally, the XMI returned to “kiss” the underside of the broken trendline. This was no happy reunion, however, as the result was a clear and precise rejection of price by the trendline.


What is the significance of this rejection? It simply suggests that prices will not return to the pace of advance that they enjoyed while they were above the trendline. It doesn’t necessarily mean that a new downtrend will begin in earnest. It could simply be that, notwithstanding the swift selloff following the August breakdown, prices could drift more or less sideways for some time. In fact, that may be the more likely outcome – should prices remain below the trendline.

We have been asked, given the relative obscurity of the index, what our rationale is for applying technical analysis to the XMI chart. Isn’t TA simply a self-fulfilling mechanism? Undoubtedly there is some of that. However, we do believe that there is a natural flow or pattern to prices, regardless of the amount of influence on the security by market participants. How else does one explain the post-2009 trendline with its perfectly conforming prices? Randomness?

Another piece of evidence to support the impact of Technical Analysis on a product like the XMI that has very little following is shown on…
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2011 Redux- We’re About To Find Out If This Time Is Different


2011 Redux- We’re About To Find Out If This Time Is Different

Courtesy of Lee Adler, Wall Street Examiner

I commented about the 2011 comparison (reproduced below) in the October 24 Market Update Pro Trader report.

We’re about to find out if this time is different. [If you are an active technical trader, follow this saga along with me in the Pro Trader Daily or Weekly service. Publication will resume on Tuesday.]

2011 Redux

10/24/15 – There are strong similarities between today’s market pattern and the 2011 market (see chart posted on the website and at the end of this report). It’s definitely a 4 year cycle echo, but the big questions are whether this is really a new 4 year cycle upleg, and if it is, will this upleg look like the one that followed the 2011 launch.

The most significant difference between today and then is that in 2011 the Fed announced that it would begin reinvesting the proceeds of MBS paydowns, which was a direct market stimulant. Today, the Fed has continued the MBS reinvestments, but the amounts are far smaller than in 2011. The Fed mostly now sits on its hands while the BoJ and ECB do the pumping (covered in the Macroliquidity reports).

From the perspective of intermediate and longer term technical indicators, today’s patterns also look very similar to the October 2011 pattern, although the current market did not reach as oversold a level as that selloff did. And while there are no signals indicating a new bull market yet today, in 2011 those signals did not start triggering until the tail end of the October move, the first being 10-12 month cycle momentum. Today, 10-12 month cycle momentum has flashed a buy signal on the weekly chart, but not quite on the daily chart. It should do so this week.

In 2011, 3-4 year cycle momentum was borderline through most of November, not triggering a clear buy signal until the end of the month. Today, 3-4 year cycle momentum is on the cusp of a buy signal. A trend resistance breakout did not come until December 2011. Today’s market has reached a similar trendline. So the market’s behavior over the next month will either continue the 2011

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Zero Hedge

The Good Ol' Days: When Tax Rates Were 90 Percent

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Andrew Syrios via The Mises Institute,

It’s quite interesting indeed when both progressives and conservatives seem to be nostalgic for those good ol’ days in the 1950s, for different reasons, of course. Conservatives want to go back to the nuclear Leave It to Beaver family and what not while liberals like to talk about those 90-percent tax rates that we owe our prosperity to. Or something like that. We’ll focus on the latter for the time being.

Bernie Sanders n...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Phil's Favorites

The Real Value Of Cash

Courtesy of Lance Roberts via STA Wealth Management

With the "inmates running the asylum" during a holiday-shortened trading week, the upward bias to the market is set to continue. However, as I addressed last week:

"As we progress through the last two months of the year, historical tendencies suggest a bias to the upside. This is particularly the case given the weakness this past summer which has left many mutual and hedge funds trailing their benchmarks. The need to play 'catch-up' will likely create a push into larger capitalization stocks as portfolios are 'window dressed' for year end reporting.

This traditional 'Santa Claus' rally, however, does not guara...

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Chart School

2-0 Bulls

Courtesy of Declan.

A second day for bulls to shine despite modest end-of-day gains. Some indices did better than others. The Russell 2000 was the key performer. It finished with a MACD trigger 'buy' and looks ready to outperform the Nasdaq 100.  This is an important development for bulls looking for more from other indices. A move to challenge - then break - its 200-day MA, would convert August-November action into a healthy basing action.

The Nasdaq registered higher volume accumulation as a brief sojourn below the 20-day MA was reversed. It's nicely set up for a push to new swing highs.


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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

U.S. Index Futures Drop After Turkey Shoots Down Russia Warplane (Bloomberg)

U.S. stock-index futures declined after Turkey said it shot down a Russian warplane, while investors await data for further indications of the strength of the world’s biggest economy.

Airline shares are plummeting as easyJet suspends more flights to Egypt (Business Insider)

Shares in British listed airlines are tan...

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Kimble Charting Solutions

S&P 500 – Dangerous for bull case, if prices turn weak here!

Courtesy of Chris Kimble.


The S&P 500 remains inside of a rising channel that has been in place since 2010. The 5-year trend is up.

The 5-month trend is a different story, at this time.

Over the past 5-months, the S&P 500 has created a series of “falling weekly closing highs,” which is represented by line (1) above.

The S&P is testing this falling resistance line at (2) above.

If weakness takes place at (2) above, at falling resistance, it would be concerning price action for the bullish case!


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Sector Detector: Bulls wrest back control of market direction, despite global adversity

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

Some weeks when I write this article there is little new to talk about from the prior week. It’s always the Fed, global QE, China growth, election chatter, oil prices, etc. And then there are times like this in which there is so much happening that I don’t know where to start. Of course, the biggest market-moving news came the weekend before last when Paris was put face-to-face with the depths of human depravity and savagery. And yet the stock market responded with its best week of the year. As a result, the key issues dominating the front page and election chatter have moved from the economy and jobs to national security and a real war (rather than police ...

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Swing trading portfolio - week of November 23rd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Digital Currencies

Bitcoin's Computing Network is More Powerful than 525 Googles and 10,000 Banks!

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

I've decided to build our startup - Veritaseum, a peer-to-peer financial services platform, directly on top of the Bitcoin Blockchain. Many queried why I would voluntarily give up a lucrative advisory and consulting business to chase virtual coins in cyberspace. That's exactly why I decided to do it. That level of misunderstanding of what is essentially the second coming of the Internet gave me a fundamental advantage over those who had deeper connections, more capital and more firepower. I was the first mover advantage holder.

You see, Bitcoin is not about coins, currency or price pops. It is a massive computing net...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

Thank you for you time!

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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