Monday’s Close for January 25th


Monday’s Close for Jan 25, 2016
Written by: Mike Coval

Major indexes pulled back today following continued selling in oil prices along with disappointing economic data from the southwestern United States – January factory activity weakening to a reading of -34.6 from the previous -21.6 reading. Investors look to this week’s Federal Reserve policy meeting for comments on the status of future interest rate hikes.

All SPDR sectors closed in the negative with Energy, XLE leading in declines down -4.66% at $53.14 followed by Materials, XLB down -3.19% at $37.28 and Financials, XLF down -2.02% at $20.85. The Dow closed down -208.29 at 15,885.22, and the NASDAQ closed -63.24 at 4196.53. The SPX finished -29.82 at 1877.08, while the VIX rose +1.81 to 24.15. 

DIA – Down

QQQ – Down

SPY – Down

Resistance 165.84

Resistance 103.67

Resistance 194.86

Support 154.38

Support 97.25

Support 181.02

Energy: Crude oil finished down -0.55 to close at $29.79 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: Eyes will be on fourth-quarter gross domestic product data due out Friday.

Technology: As earnings season moves into full swing, Cirrus Logic, CRUS down -3.10% at $28.09 is expected to announce its quarterly earnings on 1/27 After Market Close. With a current Overweight Rating and an analyst price target of $39, shares have recently been under pressure due to Apple-related weakness.  For those looking to specifically trade over earnings volatility, a long straddle/strangle (long call and long put combined) may be intriguing if price can move more than the net debit of the long options combined.

1-25-2016 CRUS

Stock owners may choose to leg into a covered call strategy as sideways-trending Cree, CREE down -1.75% at $27.54 pulled back from horizontal resistance in today’s price action. No surprise after its recent rally following better-than-expected Q2 earnings results last week amidst optimism surrounding the restructuring of its light-emitting-diode business. Currently, the Feb 29 short call is giving a $0.47 credit for those who would not mind selling their stock at $29 if called out.

1-25-2016 CREE

Consumer Goods: Beverage manufacturer and distributor Dr. Pepper Snapple Group, DPS shares were upgraded from an “Underperform” rating to “Outperform” by analysts at CLSA along with a raised price target from $94 to $101. The stock finished higher with a +0.51% rise to $91.01 – 3 Green Arrows may be just around the corner if upside momentum can continue.

1-25-2016 DPS

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Monday’s Close for November 23rd


Monday’s Close for Nov 23, 2015
Written by: Mike Coval

Major indexes took a pause today following last week’s rally higher as price action hovers near a pivotal resistance area. Among the news for this Monday trading session – October Existing Home Sales fell -3.4% to a seasonally-adjusted rate of 5.36 million, while crude oil prices rebounded fueling a rally for energy stocks. No surprise then that Energy, XLE up +0.72% at $67.38 ended the day among sector gains along with Consumer Staples, XLP up +0.88% at $49.51.

The Dow closed down -31.13 at 17,792.68, and the NASDAQ closed -2.44 at 5102.47. The SPX finished -2.58 at 2086.59, while the VIX rose +0.18 to 15.65. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 180.16

Resistance 115.47

Resistance 211.64

Support 172.15

Support 109.40

Support 201.96

Energy: Crude oil finished up +0.12 to close at $41.87 a barrel. Track the price of crude with the Oil ETF, USO

Incometrader “Almost Good Stock!” First Solar Energy, FSLR up +0.81% at $54.88 bounced off both horizontal support as well as its curved 30 Day Moving Average support for a potential post-earnings trend continuation bull flag price pattern. Analysts from Vetr upgraded the stock to a “Buy” rating. Those looking for a cash flow strategy may find the Dec 54/53 bull put spread currently giving a $0.35 credit with a $53.65 breakeven appealing.

11-23-2015 FSLR

11-23-2015 FSLR FA

Economic News: The Chicago Fed National Activity Index rose from a -0.37 reading to a -0.04 reading for September.

Technology: InterDigital, IDCC rallied +1.28% at $53.12 today after recently issuing fourth-quarter revenue guidance above street expectations at $89M-$91M versus the estimated $84.83M. Those investors who would not mind owning the fundamentally sound Incometrader “Good Stock!” at a discount from today’s price may find the Dec 50 short put currently giving a $0.70 credit intriguing.

11-23-2015 IDCC

11-23-2015 IDCC FA

Services: MGM Resorts International, MGM up +0.93% at $22.67 confirmed yesterday’s hammer candlestick with a higher close today off of its 30 Day Moving Average and horizontal support and may be setting up a potential trend continuation pennant price pattern. Look for a break through diagonal resistance for confirmation before choosing an entry with a subsequent price target to exit near the previous high around $24.41.

11-23-2015 MGM

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Friday’s Close for October 30th, 2015


Friday’s Close for Oct 30, 2015
Written by: Mike Coval

Although stocks finished lower on this Friday trading session, the market nevertheless recorded their biggest monthly gains since October 2011. With policymakers from the European Central Bank hinting at potential additional quantitative easing measures and a possible U.S. Federal Reserve end-of-year rate hike, the S&P 500 benchmark index gained +8.3% for the month. In the meantime, Consumer Spending for September rose slightly.

The Dow closed down -92.26 at 17,663.54, and the NASDAQ closed -20.52 at 5053.74. The SPX finished -10.05 at 2079.36, while the VIX rose +0.46 to 15.07. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 180.16

Resistance 114.11

Resistance 211.64

Support 173.78

Support 105.50

Support 203.05

Energy: Crude oil finished down -0.20 to close at $46.39 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: U.S. Weekly Jobless Claims (number of people who apply for U.S. unemployment benefits) rose slightly to 260,000 from 259,000.

Healthcare: Incometrader “Almost Good Stock!” AbbVie, ABBV confirmed a trend reversal double bottom-like price pattern with a break of horizontal resistance on high volume and 3 Green Arrows. How did I find I find this fundamentally sound stock to potentially trade, you ask? Simply click on the Incometrader Upside Breakout Search and find potential stock picks in mere seconds. Those looking at a cash flow strategy may find the Nov 56.50/54.50 bull put spread currently giving a $0.45 credit with a $56.05 breakeven intriguing.

11-1-2015 Upside Breakout Search

10-31-2015 ABBV

10-31-2015 ABBV FA

Technology: With Nvidia, NVDA’s earnings results scheduled to be released on 11/4 After Market Close – those who like to specifically trade over earnings volatility may find a Nov or Dec long strangle (long call and long put combined) appealing as long as price can move more than the net debit of the options. Recently, analysts at Morgan Stanley upgraded the Incometrader “Almost Good Stock” from an “Underweight” rating to an “Equalweight” rating while raising their price target on the stock from $21 to $28.

10-30-2015 NVDA

10-30-2015 NVDA FA

Services: Following strong third-quarter earnings results with an EPS beat of $0.03 cents along with better sales and a subsequent earnings gap higher, Incometrader “Almost Good Stock!” Ebay Inc., EBAY at $27.90 had no problems rallying to a higher high. With price now rolling over from resistance, stock owners who are looking for additional premium may choose to leg into a covered call position by selling a higher strike call. Currently, the Nov 28.50 is giving a credit of $0.37 if one would not mind selling their stock at $28.50 if called out.

10-30-2015 EBAY

10-30-2015 EBAY FA

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Wednesday’s Close for October 28th


Wednesday’s Close for Oct 28, 2015
Written by: Mike Coval

Stocks rallied higher after news that the U.S. Federal Reserve policy makers left interest rates unchanged while leaving the door open for a possible rate hike during its December meeting. It was no surprise then given a potential rate hike still possible for 2015 that Financials, XLF up +2.34% at $24.46 led in sector gains which was then followed by Energy, XLE up +2.22% at $67.25 and Materials, XLB up +1.51% at $45.13. Utilities, XLU rounded out the bottom of the list declining -1.06% at $43.80.

The Dow closed up +198.09 at 17,779.52, and the NASDAQ closed +65.54 at 5095.69. The SPX finished +24.46 at 2090.35, while the VIX dropped -1.10 to 14.33. 

10-28-2015 Coval Trend Indicator

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 180.16

Resistance 114.11

Resistance 211.64

Support 173.78

Support 105.50

Support 203.05

Energy: Crude oil finished up +0.03 to close at $44.63 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: The weekly crude oil inventory report showed a smaller increase than expected. In the meantime, eyes will be on tomorrow’s Q3 GDP report.

Technology: Talk about a follow through on a support bounce entry to confirm a trend continuation bull flag price pattern. Maxim Integrated Products, MXIM surged +9.26% to $42.01 on high volume amidst speculation that Texas Instruments, TSN up +1.09% at $58.67 may be in talks to buy out the chipmaker company rivaling any current interest from Analog Devices, ADI up +0.77% at $61.86.

10-28-2015 MXIM

Iron condor lovers might be intrigued by the current sideways trending action of Avago Technologies, AVGO up +4.61% at $127.09. The Incometrader “Good Stock!” announced an industry-first demonstration of a multi-reader channel technology that supports the product development of next-generation HDD controllers with high-performance data rates up to 4.0GHZ. Avago multi-reader channel products are now shipping out to customers.

10-28-2015 AVGO

10-28-2015 AVGO FA

Services: Analysts at Axiom Capital Management maintained their “Buy” rating on Amazon, AMZN up +1.00% at $617.10 while also boosting their price target on the stock from $650 to $727. The internet commerce giant recently gapped higher to break through horizontal resistance along with 3 Green Arrows after the company reported strong top-line and bottom-line beats in third quarter results with revenue of $25.4 billion versus the expected $24.9 billion.

10-28-2015 AMZN

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Friday’s Close for October 23rd


Friday’s Close for Oct 23, 2015
Written by: Mike Coval

Major indexes extended yesterday’s gains (when European Central Bank President Mario Draghi indicated that further easing may be a possibility) amidst a surprise interest rate cut from the People’s Bank of China along with upbeat earnings results from Microsoft, MSFT up +10.08% at $52.87 and Amazon, AMZN up +6.23% at $599.03. No surprise then that Technology, XLK up +2.79% at $43.83 finished the session as the top-performing sector. The Dow closed up +157.54 at 17,646.70, and the NASDAQ closed +111.81 at 5031.86. The SPX finished +22.64 at 2075.15, while the VIX rose +0.01 to 14.75. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 180.16

Resistance 114.11

Resistance 211.64

Support 173.78

Support 105.50

Support 203.05

Energy: Crude oil finished up +0.03 to close at $44.63 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: U.S. Weekly Jobless Claims (number of people who apply for U.S. unemployment benefits) rose slightly to 259,000 from 256,000.

Technology: Facebook, FB up +2.53% at $102.19 opened above $100 for the first time since its Initial Public Offering to finish today with a break through horizontal resistance on increased volume. The social networking giant recently announced it had indexed more than two trillion posts from its network as a way for users to track news events in real time through their news feed.

10-23-2015 FB

Network-equipment company Juniper, JNPR shares surged +5.81% to $31.49 after third-quarter sales reported $1.25 billion – an increase of 11% year-over-year. In addition, profit came in at $197.7 million or 51 cents a share compared with $103.6 million or 23 cents a share the previous year. Price confirmed a trend continuation horizontal bull flag price pattern after breaking through short-term horizontal resistance on increased volume.

10-23-2015 JNPR

Services: Looking for a stock going, well… nowhere? Iron condors may be intrigued by the intermediate-term sideways trend of Ulta Salon Cosmetics & Fragrance, ULTA down -1.26% at $165.91 as price continues more of its neutral range. In fundamental news, analysts at Wells Fargo initiated a “Market Perform” rating on the Incometrader “Good Stock!”

10-23-2015 ULTA

10-23-2015 ULTA FA

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Tuesday’s Close for October 20th


Tuesday’s Close for Oct 20, 2015
Written by: Mike Coval

It was a relatively quieter Tuesday session as stocks remained mostly flat within a narrow trading range. Earnings season continues to unfold with International Business Machines, IBM down -5.75% at $140.64 failing to ignite any upside spark to the Dow Jones Industrial Average after the company reported weaker than expected revenue and a lowered guidance, while Verizon, VZ up +1.21% at $45.24 and United Technologies, UTX up +3.88% at $95.62 both surged on earnings beats.

SPDR sectors ended on a mixed note with Industrials, XLI up +0.67% at $52.97 and Financials, XLF up +0.59% at $23.67 leading to the upside and Healthcare, XLV down -1.57% at $68.91 and Technology, XLK down -0.26% at $42.02 dragging on the downside. The Dow closed down -13.43 at 17,217.11, and the NASDAQ closed -24.49 at 4880.97. The SPX finished -2.89 at 2030.77, while the VIX rose +0.77 to 15.75. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 173.86

Resistance 110.66

Resistance 203.05

Support 167.21

Support 98.84

Support 198.99

Energy: Crude oil finished down -0.05 to close at $45.84 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: September Housing Starts increased +6.5% to 1.207 million from a previous 1.132 million in August.

Financials: With a strong resistance area around $36Blackstone, BX down -1.68% at $33.36 could not break past this ceiling after the New York firm reported a Q3 loss of $255 million or $0.40 a share down from a profit of $251 million or $0.41 a share in the same period a year ago. The company cited a slowdown in deal-making activity for its private-equity business.

10-20-2015 BX

Technology: Looking to trade a little earnings volatility? Incometrader “Good Stock!” ON Semiconductor, ON up +1.64% at $10.56 is scheduled to report its quarterly earnings on 10/29 After Market Close. Traders who do not mind the unpredictable nature of earnings announcements may find the Nov long strangle (long call and long put combined) intriguing if price can move more than the net debit of the options combined. The stock was recently upgraded by analysts at Robert W. Baird from a “Neutral” rating to an “Outperform” rating.

10-20-2015 ON

10-20-2015 ON FA

Services: To break or not to breakwill the buying momentum continue as Costco, COST up +0.87% at $154.56 makes its way up to the previous intermediate-term resistance high; if not, stock owners wanting to collect some extra premium may be on the lookout for a possible resistance pullback opportunity to potentially leg in to a covered call position. Analysts at Telsey Advisory Group recently reaffirmed their “Outperform” rating on the stock while raising their price target from $156 to $160.

10-20-2015 COST

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Thursday’s Close for October 15th


Thursday’s Close for Oct 15, 2015
Written by: Mike Coval

After testing old resistance now new support, the U.S. market saw a broad-based rally amidst comments from two European Central Bank policy makers that more monetary easing may possibly be in line and earnings releases that came in better than expected including Citigroup, C up +4.44% at $52.97 along with Goldman Sachs, GS up +3.04% at $184.96 and Philip Morris International, PM up +1.88% at $86.07.

10-15-2015 SPY

All SPDR sectors rallied higher with Financials, XLF up +2.27% at $23.41 leading as the top-performer followed by Healthcare, XLV up +2.23% at $69.14 and Energy, XLE up +1.80% at $69.14. The Dow closed up +217.00 at 17,141.75, and the NASDAQ closed +87.25 at 4870.09. The SPX finished +29.62 at 2023.86, while the VIX dropped -1.98 to 16.05. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 173.86

Resistance 110.66

Resistance 203.05

Support 167.21

Support 98.84

Support 198.99

Energy: Crude oil finished up +0.54 to close at $46.92 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: U.S. Weekly Jobless Claims (number of people who apply for U.S. unemployment benefits) dropped to 255,000 from 262,000.

Healthcare: Even with today’s quarterly earnings release and cautious comments for 2016, UnitedHealth, UNH down -1.56% at $120.17 continues to go relatively nowhere in its current sideways pattern. Iron condor lovers may find the neutral range appealing now that the company has released its earnings results and unpredictable earnings volatility is out of the way.

10-15-2015 UNH

Basic Materials: CF Industries, CF up +1.68% at $53.41 may be setting up a potential trend reversal variation double bottom price pattern. Analysts at Cowen & Company upgraded the chemical manufacturer from a “Market Underperform” to a “Market Perform” rating. Look for a break through horizontal resistance for confirmation before choosing an entry.

10-15-2015 CF

Technology: Likewise, analysts at Atlantic Equities upgraded Adobe Systems, ADBE up +3.54% at $86.77 from a “Neutral” rating to “Overweight” while raising their price target from $80 to $97. If price can break above its $86 horizontal resistance, we may see confirmation of a potential trend continuation ascending triangle price pattern.

10-15-2015 ADBE

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Tuesday’s Close for October 13th


Tuesday’s Close for Oct 13, 2015
Written by: Mike Coval

After recently breaking through resistance, it appears that major indexes may be testing a new support with a shooting star candlestick in today’s price action on relatively lighter volume. All SPDR sectors closed in the negative with Healthcare, XLV down -1.25% at $67.76 leading the way followed by Industrials, XLI down -1.07% at $52.82 and Energy, XLE down -1.04% at $67.34. The Dow closed down -49.97 at 17081.89, and the NASDAQ closed -42.03 at 4796.60. The SPX finished -13.77 at 2003.69, while the VIX rose +1.50 to 17.67.

10-13-2015 SPY

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 173.86

Resistance 110.66

Resistance 203.05

Support 167.21

Support 105.50

Support 198.99

Energy: Crude oil finished up +0.11 to close at $46.77 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: In news abroad, China’s trade balance for September showed a 20.4% decline in imports.

Technology: Look for a possible earnings pullback to a higher low tomorrow as microprocessor maker Intel, INTC down -0.53% at $32.04 failed to meet analyst expectations after reporting Q3 earnings of 64 cents a share or $3.1 billion from a year ago ($3.3 billion or 66 cents a share). The stock recently confirmed a trend reversal inverse head and shoulders price pattern and may test a new support.

10-14-2015 INTC

Services: Uptrending Royal Caribbean, RCL down -1.19% at $91.79 is scheduled to release its quarterly earnings on 10/21 Before Market Open. Major cruise liners seem to have staged a comeback in popularity since its troubles in 2012 partly due to lower fuel prices and a pickup in consumer spending. Those looking to trade specifically over potential earnings volatility may find a Nov long strangle appealing.

10-13-2015 RCL

Recent volatility appears to be giving the Halloween jitters to some retail companies – potential IPO Neiman Marcus Group, which will be given the ticker symbol NMG, will delay its anticipated initial public offering until 2016 due to market volatility. The upscale department store giant had filed for a $100 million IPO in August.

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Friday’s Close for October 9th


Friday’s Close for Oct 9, 2015
Written by: Mike Coval

Major indexes broke through horizontal resistance with the S&P 500 posting its best weekly gain of 2015 with a +3.3% rally. After a volatile Friday session, the broad market was able to squeak out modest gains amidst recent comments from the Fed minutes alluding to reluctance to raise interest rates due to global concerns. Healthcare, XLV up +0.46% at $68.44 and Technology, XLK up +0.44% at $41.48 ended the day as the top-performing sectors. The Dow closed up +33.74 at 17084.49, and the NASDAQ closed +19.68 at 4830.46. The SPX finished +1.46 at 2014.89, while the VIX dropped -0.34 to 17.08. 

10-9-2015 Coval Trend Indicator

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 173.86

Resistance 110.66

Resistance 203.05

Support 159.10

Support 105.50

Support 187.46

Energy: Crude oil finished down -0.14 to close at $49.49 a barrel. Track the price of crude with the Oil ETF, USO

Economic News: U.S. imported prices fell by 0.1% in September, while the price of exported goods dropped by 0.7%.

Materials: Aluminum producer Alcoa, AA down -6.81% at $10.26 tested old resistance now new support after its quarterly earnings missed expectations for both earnings and revenue. The company also lowered its 2015 automative production growth for China to be in the range of 1-2% versus the previously estimated 5-8% growth. Nevertheless, analysts at RBC Capital reaffirmed their “Sector Perform” rating today while raising their price target from $12 to $14.

10-9-2015 AA

10-9-2015 AA FA

Services: Paper and packaging company International Paper, IP may be poised to break through horizontal resistance after surging +5.21% today to $43.23 on increased volume after announcing plans to sell its 55% equity interest in its Chinese coated board joint venture to its partner, Shandong Sun Holding Group for approximately $23 million in cash. The transaction is expected to close within the next six months. Look for an actual break through resistance for confirmation before choosing a new entry.

10-9-2015 IP

With earnings season just around the corner, Incometrader “Almost Good Stock!” United Continental, UAL is scheduled to report its quarterly earnings on 10/19 Before Market Open. The airline holding company rallied +6.6% to $55.71 after reporting in its September operational results a 1.4% year-over-year increase in both consolidated traffic (revenue passenger miles) and consolidated capacity (available seat miles). Those looking to specifically trade over earnings volatility may find a Nov long strangle intriguing.

10-9-2015 UAL

10-9-2015 UAL FA

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Tuesday’s Close for October 6th


Tuesday’s Close for Oct 6, 2015
Written by: Mike Coval

Stocks took a breather after yesterday’s strong rally following Friday’s bullish engulfing candlestick as major indexes near a pivotal resistance area. Technical traders will look to see if price can break through resistance or if it pulls back from resistance to continue the current sideways trend. In the meantime, eyes will be on bellweather stock Alcoa, AA up +5.48% at $10.98 which unofficially kicks off earnings season on Thursday, After Market Close.

Sectors finished on a mixed note with Energy, XLE up +2.22% at $67.24 and Materials, XLB up +1.30% at $42.99 leading in sector gains while Healthcare, XLV down -2.35% at $66.86 topped decliners. The Dow closed up +13.76 at 16790.19, and the NASDAQ closed -32.90 at 4748.36. The SPX finished -7.13 at 1979.92, while the VIX dropped -0.14 to 19.40. 

DIA – Neutral

QQQ – Neutral

SPY – Neutral

Resistance 169.11

Resistance 105.50

Resistance 198.99

Support 159.10

Support 101.22

Support 190.56

Energy: Crude oil finished up +0.16 to close at $48.69 a barrel. Track the price of crude with the Oil ETF, USO

Oil and gas company Freeport-McCoRan, FCX may be poised to break through horizontal resistance on 3 Green Arrows after the stock rose +4.8% to $11.83 on news that the company was considering alternatives to combat a fall in commodity prices such as a possible spinoff, joint venture arrangements or cost cuts. Wait for an actual break above resistance for confirmation.

10-6-2015 FCX

Economic News: August data on international trade showed the U.S. trade deficit rising almost 16% to $48.3 billion due largely to a strong dollar reducing exports to their lowest level in three years.

Technology: How about a stock going nowhere in a sideways trading range? Iron condor lovers may be intrigued by range-bound Check Point Software, CHKP down -2.42% at $80.37 with the Coval Indicator flattening out. No surprise then that analysts at BTIG Research initiated coverage on the internet security stock with a “Neutral” rating.

10-6-2015 CHKP

Services: Reversal, anyone? Dupont and Co., DD rallied +7.66% at $55.21 on high volume amidst news that the company announced plans to apply cost savings of approximately $1.3 billion by end of 2016 as part of its Fresh Start Program. Look for a test of old resistance now new support before choosing a new entry. Recently, analysts at Citi upgraded the stock to a “Buy” rating.

10-6-2015 DD

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