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Jeff Bailey : 7/20/2007 12:48:42 AM

Got "shook out" of SPG on similar supply/demand in late April.

Trade blotter ... Put SPG on 4/2/07, but stopped 4/23/07. Couldn't "chase it" when it gave that horrible sell signal at $110.

Jeff Bailey : 7/20/2007 12:46:10 AM

Manpower earnings double, shares fall on outlook ... Reuters Story Link

Never know what you'll "remember" when reviewing the MM postings.

Trade blotter ... shorted 1/2 position of MAN on 6/29/07, but stopped on break to new highs 7/06/07.

Jeff Bailey : 7/20/2007 12:40:22 AM

What was the news on MAN today?

Jeff Bailey : 7/20/2007 12:38:32 AM

Good Gravy! Those RFY-GP are/were $54 x $54.40 at Thursday's close.

Jeff Bailey : 7/20/2007 12:36:15 AM

Good Gravy Keene! RIMM $234.24 !

Jeff Bailey : 7/20/2007 12:34:18 AM

Used an UPPER 5-mrt on RIMM in 6/29/07 MM. Link

Jeff Bailey : 7/20/2007 12:28:42 AM

Tomorrow morning, I'll slap a 5-MRT on the QQQQ. See if we can't "the level" for a target.

For those new to the MM, the 5-MRT is a technique I developed years ago for day trading. All we do is measure the FIRST 5-minute bar.

I take the 0% and place it at the LOW end of the first 5-minute bar, and "fit" the 19.1% to the UPPER end of that bar. Then I get a RESULTING 38.2%, 50%, 61.8%, 80.9% and 100%.

Once I've done that, I take another retracement, but to the DOWNSIDE. I place the 0% at the TOP of the 5-minute bar, and then "fit" the 19.1% to the LOWER end of the bar. Then I get a RESULTING 38.2%, 50%, 61.8%, 80.9% and 100%.

Jeff Bailey : 7/20/2007 12:21:31 AM

QQQQ Now a 5-minute interval with GREEN DAILY Pivot retracement (day trader's NQ/QID) Link

Now you can focus JUST on the QQQQ option montage and PRETEND you're the option market maker. You're NAKED Calls from $46 up the scale to $51. You're NAKED puts from $46 up the scale to $51.

You've got "bad reaction" to GOOG and MSFT.

WHERE can you inflict "Max Pain" on the LONG CALL and LONG PUTS and still finish positive for the week.

Now imagine you HEDGED all those NDX and QQQQ calls as you were AGGRESSIVELY BUYING the NQ futures the last week!

Look for the "hedge to come off" with GOOG and MSFT as a near-term catalyst. IF you can get the QQQQ back to $49.78, you'll inflict SOME pain on the $49 CALLS. The $50 PUTS will finish $0.20 in the money, but that's pocket change to the institutional trader. You'll also inflict some pain at all LOWER strikes the LOWER you can push it.

YOUR BIGGEST CHALLENGE, is all those AGGRESSIVE shorts from last Tuesday, Wednesday, Thursday, Friday and this Monday, Tuesday and Wednesday and Thursday that are just bite'n at the bit for some Exedrin. Those that still have an account that is.

Jeff Bailey : 7/19/2007 11:20:57 PM

VXN.X 5-minute interval chart with FRIDAY'S DAILY Pivot retracement at this Link

Jeff Bailey : 7/19/2007 11:00:39 PM

I want YOU to make YOUR guess first. WRITE IT DOWN. As IF YOU'RE WRONG, or IF I'M WRONG, then we need to make a quick adjustment. BUT, I'm still going to show you how I think VXN.X trades tomorrow, based on how a trader/computer would trade VOLATILITY and remaining QQQQ July Open Interest.

Then we'll go for the NQ/QQQQ etc.

Jeff Bailey : 7/19/2007 10:58:21 PM

Where do YOU think VXN.X opens at tomorrow?

Jeff Bailey : 7/19/2007 10:57:52 PM

I'm coming with a 5-minute interval chart.

Who, or what trade will be the likely FIRST to close a position tomorrow?

LONG CALL, NAKED CALL, LONG PUT, NAKED PUT? What happens when volatility "spikes" higher?

Jeff Bailey : 7/19/2007 10:39:46 PM

VXN's DAILY Pivot Levels for Friday are ... 15.80, 16.17, Piv= 16.42, 16.79, 17.04.

Jeff Bailey : 7/19/2007 10:35:22 PM

Now I'll calculate tomorrow's (Friday's) DAILY Pivot Levels ....

Jeff Bailey : 7/19/2007 10:34:39 PM

The NQ and QQQQ will be the futures/cash market that traders will gravitate to tomorrow.

We did a little work with the VXN.X this week, and good/bad or indifferent, you get the feel.

Yes ... had we "held" the QID to a $41.00 CLOSE (stop on close below $41.00) or even $40.85 things might have been "different."

Now ... what if GOOG $620 extended?

DID the VXN "know something" to the close?

Let's say it did and call SELLERS/put BUYERS of JULY with one-day left are going to try and sell an EXTREME spike.

Now, here's the same VXN.X chart (15-minute intervals) ... Link

Jeff Bailey : 7/19/2007 10:16:43 PM

Now some volatility from GOOG, and perhaps MSFT. Here's the QQQQ July options with one-day left for its expiration. Link

Looks like QQQQ traders were playing/speculating $50.00 into GOOG and MSFT.

Some "pain" could be delivered to the $49.00 calls, if looking at what LONG contract has the risk.

I'm thinking $49.40 close at most.

Jeff Bailey : 7/19/2007 10:11:09 PM

NDX naked calls got squeezed good to their expiration Link , and my QID play from yesterday put us right in the middle of the "bear hug."

Keene Little : 7/19/2007 10:11:59 PM

Friday's pivot tables: Link and Link

The stars are aligned for a major high on Friday, a Fibonacci 89 days from the March low. The EW pattern would look best with a minor high on Friday morning which will be an opportunity to sell it and we'll see what develops from there. If it develops into just a pullback and then continuation higher then it will likely go a lot higher and into August. Otherwise we should start the long road back down.

DOW: looks like the Fib level at 14052 could be a good upside target. Link
SPX: same pattern, upside potential 1558-1562. Link
NDX: this one looks like it may have put in its high (which might mean the same for the others). The wave count looks finished on it and therefore I'd be looking to short any bounce on this index. Link Even the daily chart shows it closed right at the top of its parallel up-channel from July 2006. This looks ready to tumble. Link
RUT: still leaves me guessing. Link
GOOG: I liked GOOG as a short on Monday when it hit its Fib target at 554 and its upper trend line along the highs since April. After its post-earnings punishment following Thursday's close I like the short even better. Don't be bashful about taking some profits off the table around 504, the bottom of its parallel up-channel. Link

Jeff Bailey : 7/19/2007 10:07:09 PM

RIMM moves up to #8 weighting in NDX/QQQQ. CMCSA now #9.

PCAR jumps to #14. SHLD #16.

7/19/07 CLOSE weightings Link

OI Technical Staff : 7/19/2007 9:59:59 PM

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Jeff Bailey : 7/19/2007 6:15:54 PM

Hmmm, today is a week past 7/12/07. I'll just be willing to think somebody already knows that its NAV fell the past 5 sessions. 11:35 AM is my guess.

Jeff Bailey : 7/19/2007 6:13:41 PM

PHF $9.86 -1.79% ... recent NAV was $10.03 on 7/12/07 Link

PHF is a closed-end "junk bond" fund. It holds a large basket of "junk bonds."

Each day, the PRICES of all those junk bonds will fluctuate, yet the MARKET actually sets the PRICE of PHF itself, which at today's close was $9.86.

On 7/12/2007, PHF's management "benchmarks" the prices of its holdings, and that benchmark is actually the Net Asset Value of the fund (mutual funds do the same thing, but they do it EVERY day). Closed end funds like PHF can trade at PREMIUMS and DISCOUNTS to their Net Asset Value.

PHF pays a MONTHLY dividend of $0.075/share currently (has had a good history of paying that each month) so annually, $0.075 x 12months = $0.90/share.

PHF closed $9.86. SEC Yield is $0.90 / $9.86 = 10.95%.

Jeff Bailey : 7/19/2007 6:03:04 PM

Might want to save today's closing Market Watch.

If we're going to see any type of meaningful pullback, then I would have to think RUT.X would lead the decline (weakness usually leads a decline).

If RUT.X just sits around, and STRENGTH pulls back to support, then buyers will likely buy the STRENGTH pullback.

If I could make ONE "key" observation today, which I did, it was a rather "sharp" decline in our junk bond PHF.

Today's bar in the PHF looks similar to yesterday's RUT.X.

Monitor BSC $138.93 -0.29% has it still hangs around its PnF chart BEARISH vertical count.

You know "the news." Amazing to even think the MARKET figure it out earlier this year.

Sometimes, all the bad news comes out at the bottom. And when it does, and I see a stock achieve a bearish vertical count, I get somewhat suspicious.

Jeff Bailey : 7/19/2007 5:49:36 PM

QID $41.40 extended. Still below yesterday's entry of $41.92.

Jeff Bailey : 7/19/2007 5:48:25 PM

Microsoft (MSFT) $31.51 +1.90% ... marked lower too at $31.00 extended.

Jeff Bailey : 7/19/2007 5:47:48 PM

Taking some notes ... While IBM is NOT a component of the NDX/QQQQ, it is BIG tech and key driver today.

Now GOOG is/was BIG weight in NDX/QQQQ.

Jeff Bailey : 7/19/2007 5:42:39 PM

Current OPEN MM profiles that I've made and Watch List found at this Link

Stopped on the 1/2 QID position (adjusted stop down from $41.00 to $40.85 and still got stopped).

RAISED stop on PBT 1/3 position to $13.90.

CLOSED out portion of OLN-AD from 6/1/07 entry at the bid of $3.20, when OLN was trading $22.41.

Create "new" Benchmark for rest of OLN-AD from 6/28/07 entry when stock was trading $20.57.

Keene Little : 7/19/2007 5:17:58 PM

In addition to the $504 being the middle of the 10-week trading band for GOOG that Jeff mentioned (4:51) you can see on my daily chart that that's also at the bottom of a parallel up-channel for price action from the May low. I think that could be a good spot to take some money off the table if able tomorrow. Let it bounce and then add back onto your position. Work you cost basis down that way.

Jeff Bailey : 7/19/2007 5:11:37 PM

Baidu.com (BIDU) $198.19 -0.85% Link ... $192.30 extended.

19.1% of retracement of recent 4/02/07 low close to 7/13/07 high close is $190.05. 38.2% at $167.26.

Jeff Bailey : 7/19/2007 5:06:26 PM

Closing U.S. Market Watch Link

Jeff Bailey : 7/19/2007 4:58:27 PM

Advanced Micro (AMD) Link ... jumping to $16.25 extended. If long, could bring a stop up to $14.90. 19.1% of 9/20/06 relative high close to recent 4/04/07 low close is $15.51.

38.2% at $18.31.

Stock has been mentioned, traded bullish here in MM. (6/01/07 entry, but stopped 6/6/07)

Jeff Bailey : 7/19/2007 4:51:22 PM

GOOG ... Dorsey/Wright's "med" of 10-week trading band is currently $504. "top" 552 and "bot" 456.

Keene Little : 7/19/2007 4:47:53 PM

GOOG is getting a little spanking after hours (it announced earnings)--down about $38 from its $548 close. I had shown this daily chart earlier in the week and suggested a short play as it hit its Fib target and trend line near $555. Hopefully some of you tried it. Nice pay day tomorrow if it stays down. Link

Jeff Bailey : 7/19/2007 4:49:49 PM

If short GOOG Link might cover partial here at $512. This is 38.2% of 3/02 low close to recent high close.

Has been mentioned bearish here in MM last couple of month.

Jeff Bailey : 7/19/2007 4:40:47 PM

$ndx Link

Jeff Bailey : 7/19/2007 4:38:19 PM

$oex Link

Jeff Bailey : 7/19/2007 4:35:41 PM

$INDU Link and $RUT.X Link

Jeff Bailey : 7/19/2007 4:31:53 PM

RS Chart of $RUT vs. $SPX Link

Jeff Bailey : 7/19/2007 4:30:59 PM

RS chart of $RUT vs. $NDX Link

Jeff Bailey : 7/19/2007 4:30:18 PM

RS charts of $RUT vs. $OEX Link

Jeff Bailey : 7/19/2007 4:29:36 PM

RS chart of $RUT vs. $INDU Link

RS is Relative Strength of one security Vs. another.

Some believe (as do I) it better to sell weakness and buy strength. Kick myself when I do things I don't believe in.

Jeff Bailey : 7/19/2007 4:25:06 PM

Indeed "they" are Keene. Not good enough QID $41.08 intra-day though.

Having stressed "bulls focused narrow/large" in Monday's market wrap, I'm ashamed at myself though.

With the way the StockTrader's almanac has been so "on the button" with bull heads (7/09, 7/11, 7/12, 7/13) my "top of mind" got the better of me. "Bear heads" 7/20 and 7/23, then "Bull head" 7/25.

If anything, should have PROFILED a smaller and BROADER Russell-type trade at MOST. At least used its relative weakness.

Realize the mistake, make the adjustment, then move on.

Keene Little : 7/19/2007 4:06:05 PM

Not just 14K but exactly 14K. These guys are good.

Jane Fox : 7/19/2007 3:53:24 PM

Down right ugly day for trading. Link

Jeff Bailey : 7/19/2007 3:07:54 PM

Have sold long partial shares of OLN from 5/11/07 entry. (initial MM bull profile of OLN).

Jane Fox : 7/19/2007 3:02:35 PM

Crude has hit $76.00/bl.

Jeff Bailey : 7/19/2007 2:52:07 PM

Just in case ... stepping away.

Jeff Bailey : 7/19/2007 2:51:46 PM

Swing trade bullish call exit partial alert ... one (1) of the Olin Corp. OLN Jan $20 Calls (OLN-AD) $3.20 x $3.60 at the bid.

OLN $22.41 +0.26% ...

Jane Fox : 7/19/2007 2:37:55 PM

The best trades I took today were the ones I didn't take. Not getting triggered on a losing trade is just as important has getting triggered on a winner.

Jane Fox : 7/19/2007 2:32:20 PM

My goodness this has to be one of the sweetest little patterns I have seen in a long time. Too bad the influence of the US$ and Crude have so much of an effect on this market. Link

Keene Little : 7/19/2007 1:58:24 PM

This market has really stalled. Last one to leave, turn off the lights. Drumming my fingers waiting for the next leg up so I can try a short. Going long is risky because the last leg up could be very brief and short so I don't like the risk for what should be a minor new high. But a minor new high with bearish divergences would have me interested in trying the short side because the reward side of the equation should be larger.

Jane Fox : 7/19/2007 1:47:54 PM

You have to wonder at what point will crude come back down to earth. With all political pressures on this market I use the charts as a back drop. Link

Jeff Bailey : 7/19/2007 1:45:39 PM

That is all ... stepping away.

Jeff Bailey : 7/19/2007 1:45:27 PM

Pacholder High Yield (PHF) $9.81 -2.29% ... (see 11:00 Market Watch)

Jeff Bailey : 7/19/2007 1:44:42 PM

ProShares Short Russell2000 (AMEX:RWM) $65.69 -0.65% ...

iShares Russell 2000 (IWM) $84.75 +0.60% ....

UltraShort Russell2000 (AMEX:TWM) $60.28 -1.11% ...

Jane Fox : 7/19/2007 1:06:35 PM

VIX and AD volume are bullish but the TRIN is over 1.00 Link

Keene Little : 7/19/2007 12:46:04 PM

One other possibility, especially on "consolidation opex Thursday", is for another leg down to finish a larger a-b-c pullback from this morning's high. That would put off the next leg up until later this afternoon or tomorrow.

Keene Little : 7/19/2007 12:44:47 PM

If SPX can push a little higher we'll get a 5-wave move to complete from yesterday's low. Equality between the 1st and 5th waves would be at 1557 so watch for signs of topping if we get there. Link

That 5-wave move will be either THE top of this whole rally or else we'll get just a pullback and continuation higher: Link It'll certainly be worth testing the short side and then we'll see what happens next.

Jeff Bailey : 7/19/2007 12:40:44 PM

July Trade Blotter to day ... OPEN positions ... raised stop to $13.90. Link

Jeff Bailey : 7/19/2007 12:24:53 PM

VXN 16.19

Jeff Bailey : 7/19/2007 12:24:22 PM

Swing trade stop alert ... for the QID $40.85

Jeff Bailey : 7/19/2007 12:12:47 PM

VXN 16.32 -2.68% ... DAILY S1 16.26

Jeff Bailey : 7/19/2007 12:12:02 PM

QID 10-minute interval chart with DAILY Pivot Levels added. Link

Jeff Bailey : 7/19/2007 12:08:30 PM

Current OPEN MM Profiles that I've made at watch list found at this Link

Jeff Bailey : 7/19/2007 11:59:20 AM

That reminds me ... I will be away from the Market Monitor for the next few days as I have some administrative/client duties to attend to.

Jeff Bailey : 7/19/2007 11:52:33 AM

We should be getting news from PBT regarding July's monthly distribution. Traders should have received their June distrubition of $0.096552/share on Monday. I got mine!

Jeff Bailey : 7/19/2007 11:47:39 AM

Swing trade long raise stop alert ... for the 1/3 position in the Permian Basin Trust (PBT) $14.45 +0.20% ... to $13.90.

Jeff Bailey : 7/19/2007 11:45:51 AM

EIA Nat. Gas Storage Table found at this Link ... Build of 65 Bcf.

Keene Little : 7/19/2007 11:45:19 AM

So far all we've got is the quick spike up followed by consolidation. My expectation is for another move higher, either from here or after some additional consolidation. There's no evidence yet that we've put in the high (that would come with a break back below SPX 1540). One more high could very well do it for this rally though.

Jeff Bailey : 7/19/2007 11:40:23 AM

Valero Energy (VLO) $74.39 -2.02% ... Updated bar chart from last night's observations Link

The "bull fit 38.2%" is a technique I developed years ago. I began asking "why does a stock stop there at an all-time high (or low)" and began to see where an "old" 38.2% retracement (or 61.8%) seemed to mark an important level. An when that level was broken, a stock "never" closed back below the next level lower as the stock marched to an objective. Almost like a PnF chart's bullish/bearish vertical count.

Jeff Bailey : 7/19/2007 11:05:07 AM

11:00 Market Watch found at this Link

Jeff Bailey : 7/19/2007 10:56:08 AM

Playing the "odds," might have any traders with LONG July DIA, SPY, or QQQQ calls exiting today.

Jeff Bailey : 7/19/2007 10:54:17 AM

StockTrader's Almanac shows a "bear head" for tomorrow. Historically, Dow up 38.1% of days, S&P 500 up 28.6% and NASDAQ up 33.3%.

Jane Fox : 7/19/2007 10:53:53 AM

I think the best advise for this morning is to not trade at all.

Jane Fox : 7/19/2007 10:50:15 AM

I have to leave for a while so I will be taking all the trades off the table now.

Jeff Bailey : 7/19/2007 10:49:18 AM

At a MINIMUM, a QID long wants to see VXN gravitate back higher to WEEKLY Pivot. I'd bet an additional $0.15 on the QID (adjust the stop from $41.00 to $40.85, which I rarely do) that its NAKED CALL writers jittery early. However, if they come in hard on the NQ to hedge, then we're done.

Jane Fox : 7/19/2007 10:48:10 AM

ER is now oversold and I see a long at 857.60 alert

Jane Fox : 7/19/2007 10:46:35 AM

So far no triggers which IMHO is great.

Jeff Bailey : 7/19/2007 10:46:21 AM

VXN ... 5-minute chart. With QCharts' DAILY Pivot level turned on Link

Jeff Bailey : 7/19/2007 10:40:27 AM

Apple (AAPL) $140.07 +1.41% ... New 52-weeker again. Needs to stick around here for QID.

Jeff Bailey : 7/19/2007 10:36:01 AM

Swing trade adjust stop alert ... for the UltraShort QQQ (QID) $41.04 -0.94% ... to $40.85.

Jane Fox : 7/19/2007 10:37:08 AM

ER long now at 858.20 - daily highs at 858.80 so far enough away for me. alert

Jane Fox : 7/19/2007 10:10:39 AM

ER long at 859.20 alert

Jane Fox : 7/19/2007 10:09:51 AM

Well that VIX dip was short lived and VIX is now to new daily lows and supports the AD volume new daily highs. Bulls firmly in control now.

Jane Fox : 7/19/2007 10:03:27 AM

Mind you though this is a Thursday before OPEX Friday.

Jane Fox : 7/19/2007 10:02:50 AM

OH EEE VIX is now making new daily highs so ES will probably be making new daily lows.

Keene Little : 7/19/2007 9:55:56 AM

With the quick drop and push to a new high in the NDX it has caused me to rethink the EW count for the rally from June 8th. Rather than the clean impulsive wave count to the upside (as shown in the 60-min chart posted last night, below), which was looking for a longer 4th wave correction than that quick spike down that we got, I'm now thinking the rally is an ending pattern made up of 3-wave moves for each of the 5 waves up. This 120-min chart shows my thinking on this: Link

Without trying to complicate things here, what it means is the current leg up could very likely be finishing it off. The revised wave count considers the 5th wave up as having started from the July 11th low. It will be an a-b-c move (since it's an ending pattern which is made up of all 3-wave moves) and the leg up from yesterday's low is wave-c of 5. In other words it's the very last one.

As shown on the chart, a small pullback/consolidation today should lead to a final push higher later today or tomorrow. A Fib target and trend line across the highs point to the possibility for 2063.60 to be THE high. If it plays out this way it will certainly be worth testing the short side for a position trade.

Jane Fox : 7/19/2007 9:55:47 AM

AD volume to new daily highs.

Jane Fox : 7/19/2007 9:53:57 AM

Internals are bullish so if you trying to trade the overbot reversal don't hang around too long. Link

Jane Fox : 7/19/2007 9:39:38 AM

AD line is a whopping +1348

Jane Fox : 7/19/2007 9:26:12 AM

Take a look at the AD line and volume yesterday. Doesn't instill a lot of confidence that the bulls had a firm grip on the ball does it? Link

Jane Fox : 7/19/2007 9:23:04 AM

Crude just keeps on trucking and as long as it does Gold will not selloff. And since the US$ is still weak there is another reason for Gold to hang in there. Link

Jane Fox : 7/19/2007 9:17:52 AM

SAN FRANCISCO (MarketWatch) -- A 6.8-magnitude earthquake that struck northwestern Japan Monday has damaged a key engine parts supplier and halted production Thursday in 70% of the domestic auto industry, according to media reports.

Jane Fox : 7/19/2007 9:17:14 AM

HONG KONG (MarketWatch) -- The pace of China's economic growth accelerated to 11.9% in the most recent quarter, rapid even by Chinese standards, with economists now divided about whether authorities will move to rein in the economy. Economists had expected China's economy to grow 10.8% for the three months ended in June.

The surge in gross domestic product for the quarter ending in June, announced by the National Bureau of Statistics in Beijing on Thursday, betters an 11.1% expansion in the first three months of the year. The second-quarter data bring China's first-half economic growth to 11.5%.

"It's huge," said Standard Chartered senior economist Steven Green in Beijing, adding the data outpaced his own forecast of 10.6% growth for the quarter. "No one was expecting it to be so quick."

Jane Fox : 7/19/2007 9:16:21 AM

WASHINGTON (MarketWatch) -- Fewer Americans were laid off from their jobs last week, but the ones who've been let go are finding it harder to get work again, Labor Department data released Thursday showed.

The number of workers filing for state unemployment benefits fell by 8,000 to a seasonally adjusted 301,000 for the week ending July 14, the Labor Department reported Thursday.

It's the lowest number of initial jobless claims in two months

Jane Fox : 7/19/2007 9:05:29 AM

Yesterday's late day rally had all the markets close almost at daily highs so it didn't take much overnight to break PDHs. However, what was interesting was the dip all the markets took right after the overnight session opened. YM did not take the dip because its ON session opens later.

In any case higher highs and lows tell me the bulls are in control. Link

Keene Little : 7/19/2007 8:59:25 AM

I just looked at NQ and I see it's already well above its previous high so that says the consolidation idea is not the right one. Look for a rally today. This will get interesting since that would open up the possibility that we're going to see a market high (as in THE high) by tomorrow.

Keene Little : 7/19/2007 8:51:52 AM

Equity futures reacted favorably to the 8:30 reports and that was on top of a bullish overnight session. I expect either a bullish day today or a day that consolidates further (as per the NDX chart posted below). It's opex Thursday, a day not known to be very exciting.

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