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Market Oracle FREE Newsletter

Category: Financial Markets 2021

The analysis published under this category are as follows.

Stock-Markets

Tuesday, July 20, 2021

FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International / Stock-Markets / Financial Markets 2021

By: EWI

Hi,

2021 is hallway over. In Q3 and Q4, what in the world should you be watching?

That's not an easy question to answer. There is a lot to look at. In just the past 2-3 months:

  • Bitcoin got cut in half
  • Crude oil rallied from $62 to $76 - that's 20%
  • Gold dropped ~8%, then rebounded
  • USD had its sharpest rally in over a year
  • Nikkei 225 dropped 1700 points and then rallied 1200
  • Nasdaq rose1600 points - over 12%

Markets are MOVING -- and surely, you're wondering what Elliott waves show for Q3/Q4.

Read full article... Read full article...

 


Stock-Markets

Saturday, July 10, 2021

Escaping The United States May Be Leading To An Extreme Market Bubble Setup / Stock-Markets / Financial Markets 2021

By: Chris_Vermeulen

The past few years have seen housing prices skyrocket as Flippers, Speculators and Traditional Buyers jump into home buying or selling to relocate to different areas throughout the US.  One interesting facet of this phenomenon recently hit NBC news over the past few days related to the super hot Boise Idaho and Coeur D’Alene Idaho market.  Home prices in the Boise area have skyrocketed higher by over 30% in just 12 months. In Coeur D’Alene, home prices have risen over 85% in the past 12 months.

Is a Supply/Demand Measure Distorted By Recent Buying Activity – And What’s Next?

My concern is that the post-COVID buying/relocating trends have pushed the Supply/Demand pricing factors well past the equilibrium.  Simply put, the moratoriums and policies related to home renters and homeowners throughout the COVID-19 crisis have created a supply crisis at a time when many people had the capabilities to sell and relocate into different areas of the US at the same time.  Diminishing supply with hyper-active demand pushes price levels upward and to the left, as illustrated on the Supply/Demand chart below.

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Companies

Thursday, July 08, 2021

Why U.S. Corporate Bankruptcies Could Skyrocket / Companies / Financial Markets 2021

By: EWI

"U.S. bankruptcies in the first quarter of 2021 and all of 2020 were above the 13-year average"

An April 17 article headline on the website of National Public Radio says:

U.S Economy Looking Good As Spending Jumps In March

And, on April 29, The New York Times said:

Americans' spending on durable goods -- cars and furniture and other goods meant to last a long time -- rose at a stunning 41.4 percent annual rate in the first three months of the year.

Considering that the economy is "looking good," economic observers might conclude that a wave of corporate bankruptcies is of little concern.

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Stock-Markets

Monday, July 05, 2021

Roaring Comeback of Reflation and Commodities / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 broadening leadership and fresh reflationary ATHs are here – the FOMC „tightening“ hit notwithstanding. Energy, financials and industrials I discussed yesterday and before, were among the leaders, with tech not staying far behind. Crucially, the tech breadth was also improving – such rotations are the stock bull market‘s health. Neither the VIX nor the put/call ratio are arguing. The sentiment going into today‘s non-farm payrolls, remains constructive, and unlikely to result in reconstruction of the Fed tightening bets. Such was my real-time Twitter interpretation.

Credit markets remained constructive, and risk-on this time – that‘s in line with value upswing, accompanied by the Treasury yields‘ inability to retreat further. Near the top of its recent range, the 10-year Treasury yield is trading within the summer bond market calm atmosphere, and so are the beaten down inflation expectations at a time when:

(…) the dollar is catching a strong bid. We‘re still in a reflation, in the reopening trades stage – one where inflation expectations have been (unduly) hammered down while inflation hasn‘t taken a corresponding turn. Notably, commodities haven‘t been derailed in the least, so pay no attention to lumber – the real assets‘ world is much richer and profitable.

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Stock-Markets

Wednesday, June 30, 2021

How Central Banks Murdered the Markets / Stock-Markets / Financial Markets 2021

By: Michael_Pento

The Japanese Government Bond market is nearly $10 trillion in size. It is the 2nd biggest bond market in the world. However, it comes as a shock that this humongous market barely trades any longer.

The government of Japan has systematically supplanted and killed the entire private market for its bonds. Meaning, there are almost no private investors who will touch it any more. The Bank of Japan has bought so much debt that it forced interest rates below zero percent back in 2016; and the result is the free market has subsequently died.

Investors are now refusing to buy JGBs, which are guaranteed to lose principal in nominal terms—and deeply negative results after adjusting for inflation. But at the same time, are not in any hurry to sell their existing holdings because they understand the government will be propping up bond prices. 

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Stock-Markets

Tuesday, June 29, 2021

Jumping the Fed Tightening Ship / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 powered higher after the daily pause, yet its solid gains don‘t have such a risk-on feel as the credit markets do. Depending on tech heavyweights for the lion‘s share of gains isn‘t though an immediate concern – the market breadth is slowly improving after value stocks were bombed out post-FOMC. Signs of life are returning, facilitated by the Fed‘s $8.1T and growing reasons to celebrate, so don‘t be spooked too many lower knots in VIX when there is no panic in the options arena either.

As tech-reliant as the S&P 500 is, the path of least resistance is still higher – and in the same way (tight trailing stop-loss) Nasdaq could be approached too, so as to protect our open profits while letting them grow.

PCE deflator readings often come below CPI thanks to the „weighted substitution effect“ at play, and it would come back to haunt the Fed. Taken to extremes, you downgrade from a steak to a hamburger, and then what? Cat or dog food? Obviously, this measure is favorable to the Fed as it defers the taper speculation further to the future.

Together with the redefinition of how long transitory used to last earlier, and what transitory (inflation) means now, the central bank wins in leaving the punch bowl available for longer (the job market offerrs plenty of excuses too). If last week gave us any lesson, it was that market players are all too quick to sell both the winners and losers. The spike in Treasuries was a clear warning sign of stress.

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Stock-Markets

Thursday, June 24, 2021

"Everybody's Getting Rich (and Having Fun) Except Me" / Stock-Markets / Financial Markets 2021

By: EWI

The idea of "missing out" on stock market gains "literally generates fear in many people"

Hardly anyone wants to miss the party -- whether on Wall Street or elsewhere.

Thus, the acronym FOMO -- which stands for the "fear of missing out" -- is in vogue. After a 12-years long bull market, the acronym has appeared in many financial articles.

Yet, the acronym was coined years before the current bull market.

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Stock-Markets

Friday, June 18, 2021

Has the Dust Settled After Fed Day? Not Just Yet. / Stock-Markets / Financial Markets 2021

By: Mike_Paulenoff

I am going to look at a few markets (ES, Gold, DXY) that have reacted significantly to the Fed's "message" from yesterday afternoon. What's the message? Here's my synopsis:
After pumping $8 trillion into the economy since March 2020 to provide the necessary stimulus to emerge from the pandemic lockdown, growth is relatively strong, inflation is finally above our 2% benchmark-- though probably will prove to be a transient blip, but the labor market remains well-below Full Employment... So we think we might need to raise the Fed funds rate a measly 25 basis points at the end of 2022, and maybe another measly 25 basis points at the beginning of 2023. In the interim, nothing really will change.

If my synopsis of what the Fed said yesterday (remember, they didn't DO anything) is reasonably on point, then we see a host of previously one-way markets reacting to "the news" with counter-trend moves that should prove to be a healthy refresher of their still powerful dominant trends.

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Stock-Markets

Thursday, June 17, 2021

Stocks, Gold, Silver Markets Inflation Tipping Point / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 hasn‘t extended Monday‘s gains, continuing to trade in a cautious, tight range. Not that it would be driven by Treasury yields that much on a daily basis – the tech breather was one day delayed, but still didn‘t erase Monday‘s gains in full. Yes, Nasdaq didn‘t reverse, and I‘m looking for it to reassert its strength in spite of having approached the rising resistance line connecting the Feb and Apr highs.

Sure, a little rotation later today wouldn‘t be unimaginable as I am looking for the Fed to largely bypass bringing up taper, which would mean continued ostrich pose when faced with rising inflation (did you see yesterday‘s PPI beating expectations? Another confirmation of my Monday‘s points of inflation being baked in the cake, and in spite of all the transitory rhetoric, working its way through the system as reliably as water through Titanic‘s compartments. The coming Fed disappointment in doing the right thing (fighting inflation even as late as it is now before the expectations become obviously unanchored, eventually turning velocity of money around).

Let‘s check my Monday‘s assumptions and where we stand in the run up to today‘s FOMC:

(…) Paring the bets is getting underway before this week‘s FOMC – the Fed is perceived to perhaps want to at least start debating taper, if not present the sketch of its seriously watered down shape. They‘ll make taper hints and noises at most, it would be much ado about nothing – the markets are just getting spooked now, most notably the dollar (having risen on the unreasonable expectation something palpable and material would come out of that – but remember, talk is cheap, and Jackson Hole is the more likely venue and time that would happen, with 2022 most probably being the year of taper).

The yields reprieve … I see lasting through the summer. Autumn, that would be another cup of tea – apart from the unyielding $CRB index, rising oil prices affecting sectors beyond transportation, and the job market heating up (hiring difficulties), the serene period in Treasuries would be over. Yes, that means I think the bond markets have it wrong with their sudden appreciation, and that equities and commodities are right not to tumble.

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Stock-Markets

Monday, June 14, 2021

More Banks & Investors Are NOT Believing Fed Propaganda / Stock-Markets / Financial Markets 2021

By: MoneyMetals

As inflation continues to heat up, gold and silver markets are once again on the verge of breaking out.

On Thursday, the Bureau of Labor Statistics released much-anticipated Consumer Price Index data. The CPI came in at a full 5.0% year over year through May. 

The so-called “core” rate, which excludes food and energy, showed an annual increase of 3.8%. That represents the biggest jump since all the way back in 1992.

Meanwhile, Federal Reserve officials continue to downplay the inflation threat. They insist the recent surge is transitory and doesn’t reflect a major trend to come.

But as Denver’s local 9NEWS reported, not all economists are echoing the Fed’s messaging on inflation.

Read full article... Read full article...

 


Stock-Markets

Monday, June 14, 2021

Market Inflation Bets – Squaring or Not / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 shook off another record making inflation reading, and bond markets couldn‘t be happier. Volatility is back down, but the option traders turned cautious – that‘s fodder for the next upswing eventually. Many signs are pointing towards it – emerging markets rising with the dollar on the defensive, for example. Yes, the dollar with yields are key to watch now.

S&P 500 was led higher by Nasdaq, which more than welcomed further retreat in yields. The tech led rally is here, and value while not down and out, is taking a breather. Especially financials don‘t like the move in yields, and we aren‘t at the 1.40% mark on 10-year Treasury bond yet. The summer lull in bonds is here, and my views on inflation getting permanently elevated, Fed‘s taper plays, bond yields retreat, inflation rearing its ugly head later this year before a growth scare strikes, can be found in the Latest Highlights and this week‘s articles amply discussed.

So, stocks don‘t look like retreating, as the bond market momentum doesn‘t favor much downside, and tech would likely overpower that.

Let‘s briefly check the reactions of other markets to yesterday‘s well telegraphed CPI springboard theme in stocks and precious metals.

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Stock-Markets

Monday, June 14, 2021

The FED Holds the Market. How Long Will It Last? / Stock-Markets / Financial Markets 2021

By: P_Radomski_CFA

With investors discrediting fundamentals to follow the FED’s instruction, it seems everything relies now on a few people’s say-so.

It's a Bird, It's a Plane, It's the FED

With Jerome Powell, Chairman of the U.S. Federal Reserve (FED), donning his cape like Superman and his monetary crew akin to The Avengers, investors’ faith in the FED was on full display on Jun. 10. Case in point: with the headline Consumer Price Index (CPI) surging by 4.93% year-over-year (YoY) – the highest YoY percentage increase since 2008 – the bond, stock and currency markets barely flinched.

The commodity PPI surged by 17.25% YoY in April. And if you exclude the 17.36% YoY jump in July 2008, it was the largest YoY percentage increase since December 1974. For context, the commodity PPI often leads the headline CPI and that’s why tracking the former’s movement is so important. Moreover,  reconnecting with the green line implies a ~5.50% YoY percentage increase in the headline CPI.

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Stock-Markets

Thursday, June 03, 2021

No More Market Bloodbath – Beyond Cryptos / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 again rejected within sight of ATHs – again, but not totally convincingly. Especially the credit markets‘ mixed picture leans in effect slightly bullish, yet for the 500-strong index, the source of short-term worry would likely be the tech sector again. Either not pulling ahead as strongly, or taking a breather, which should be more noticeable in XLK than in Nasdaq 100.

VIX looks to be done declining, and the option traders have hedged their Thursday‘s bets. Given the wavering risk-on segment of the credit markets, it‘s probably justifiably enough. Inflation expectations rose a little though, faster than the Treasury yields moved, which could be taken as a sign of value likely to do overall fine next – and that‘s also confirmed by smallcaps and emerging markets. As I wrote on Friday:

(…) Is that the worst of the inflation scare being over, for now? Probably yes, and the retreating Treasury yields are mollifying – but as explained in ample detail, this calm before the (autumn) storm, is deceptive. Calling the Fed‘s bluff, precious metals (and some commodities) are onto something, really.

It‘s only the cream of select commodities that has been taken off – in the big scheme of things, nothing but a consolidation within an existing secular bull market, is happening there. While the inflation trades have been dialed back to a degree, they haven‘t been broken as the Fed is in a reactive, not proactive mode. More precisely, it remains in denial of the inflation ahead.

In other words, I am not buying into the taper smoke and mirrors. The Fed knows that it can‘t (seriously) take away the support – it can only talk that, and look what the market does next. It‘s a long journey of preparation, and I am not looking for the central bank to move any time soon:

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Stock-Markets

Monday, May 31, 2021

Stock Market Summer Correction Review, Crypto CRASH, Bitcoin Bear Market Initial Targets / Stock-Markets / Financial Markets 2021

By: Nadeem_Walayat

This article is an excerpt from my recent extensive analysis that concludes in my latest biotech stock picks with the potential to X10 over the coming years Five More Small Cap Bio and Tech Stocks to Invest for 2021 and Beyond! that has first been made available to Patrons who support my work.

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  • Invest and Forget
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  • HIGH RISK STOCK BUYING LEVELS
  • RISK RATINGS
  • WESTERN DIGITAL - WDC $71 - CHIA! - Risk 1
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  • Biotech stock 1 - Cheap Low Risk Pharma - Risk 1
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  • Covid India Black Mold Epidemic
  • Bitcoin and Raven Coin Buying Levels

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

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Stock-Markets

Friday, May 28, 2021

Eerily Serene Risk off Financial Markets / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 had a mixed day, and the credit market underlines the shift to risk-off. Halfway shift, to be precise – the high yield corporate bonds recovered the intraday downside but value sold off all the way to the closing bell. Well, rising yields used to add to tech‘s problems since mid Feb, and retreating yields don‘t breathe enough life into the sector now. It‘s clearly visible that the high beta segments are facing the yields‘ headwinds while $NYFANG is in the black, but more than a little lagging.

The Treasury market reprieve I announced on May 18 to last more than a good few weeks, is here. While it works to lift tech and hamper value, the days of value doing fine are far from over as the VTV:QQQ ratio illustrates:

(…)  We‘re still in the value outperforming growth environment (reflation and reopening themes), it‘s just right now (last few days) that tech is pulling stronger ahead than value. ... Value‘s reaction to the yields trajectory ahead would be telling, and I have no doubts there is quite some more juice left in the long value trade (and that the Russell 2000 isn‘t rolling over to the downside here).

Emerging markets are welcoming the dollar woes and yields reprieve, and the Russell 2000 isn‘t too much of a drag either. VIX refused further downside yesterday, and is hedging off bets as much as the option players do – no change in prior trends here, just a move away from the complacent end of the spectrum. The stock bull run is still about dips being bought.

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Stock-Markets

Friday, May 28, 2021

Stock Market Cycles Tipping From Euphoria To Complacency – Gold Setting Up For Rally Above $2000 Again? / Stock-Markets / Financial Markets 2021

By: Chris_Vermeulen

Gold has set up a very strong confluence pattern across multiple foreign currencies recently.  This upside confluence pattern suggests that Gold has now moved into a much stronger bullish price phase compared to various currency pairs.  This upside move in precious metals aligns very well with my broad market cycle phase research. I urge traders/investors to start paying attention as we transition into this new longer-term cycle phase.

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Stock-Markets

Sunday, May 23, 2021

Crypto, Stock Markets Rising from the Ashes / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

S&P 500 caught a partial bid yesterday, enough to stave off the break of prior Wednesday‘s lows. All isn‘t fine under the surface though as yet another Fed trial baloon emerges – this time, talking about talking taper, doing predictable wonders for the dollar. As I have stated, it‘s when the Fed would really move that the greenback would go up again. The important word here is „really“ - this doesn‘t qualify yet, but the noises can‘t be ignored.

That‘s taking me to the partial bid mention as it shows in the S&P 500 sectoral action – tech rises and value continues trembling. The Russell 2000 keeps lagging while emerging markets seem to still doubt the Fed‘s seriousness. But the VIX daily move is positive as the daily spike has been clearly rejected – another, this time a smaller and pickier algo repositioning at work. At the same time, option players got positioned for another shoe to drop, tying in well with their moves overall since late Feb.

Inflationary fears aren‘t by any means quelled just yet – Treasuries disregarded yesterday‘s retreat in inflation expectations. The Fed approach needs a refresher:

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Stock-Markets

Thursday, May 20, 2021

Credit Market Wheels in Danger of Coming Off? / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

SPX backing and filling worthy of Monday‘s session – with important rotations below the surface. Namely, tech and Nasdaq underwent daily consolidation on long-dated Treasuries retreating a little. Key point though was rejection of the intraday downside, making the S&P 500 pendulum likelier to swing this week again bullish. The VIX spike was rejected while option traders didn‘t give up much of their bearish resolve, which doesn‘t spoil the bullish picture though.

Stock trading yesterday was accompanied by the bond markets moving down. Such a non-confirmation is encouraging in its implications, as the markets are still taking seriously the transitory inflation messaging in light of the less alarming nature of Thursday‘s PPI. Seems like we‘re in for a few relatively stable weeks of Treasury yields undeperforming inflation expectations before the yield climb returns:

(…) The transitory inflation story got modestly supported, but while I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.

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Stock-Markets

Tuesday, May 18, 2021

Are Apple, Tesla, and Bitcoin Entering Market Technical Excess Top Phase? / Stock-Markets / Financial Markets 2021

By: Chris_Vermeulen

In the first part of this research series, I highlighted the broad market cycles and what technical analysts call the “Excess Phase Top” process, which usually takes place after the market’s peak and set up a downward price trend.  There are a number of technical setups that take place throughout this process.  Today, I will be exploring the charts of Tesla (TSLA), Apple (AAPL), and Bitcoin (BTC) to see where they are in the process.

The suggestion I am making by highlighting these market trends and setups is that a Cash Position is a viable allocation of capital away from risks and losses.  Many traders don’t view a cash position as a properly allocated use of capital.  We believe taking a cash position at the right times can and does provide very clear benefits, including:

  1. Eliminating risks of further losses/drawdowns.
  2. Setting up a process of protecting cash and waiting for a confirmed re-entry trigger.
  3. Avoiding the failure of buying into a declining market – which is one of the biggest faults of active traders.
  4. Using the Cash position as a hedge against shifting currency/market valuations.

Remember, in many cases, broad market downtrends are often associated with bigger trends in currencies and global market sectors.  Chasing these trends can lead to further risks if you are not careful and skilled in your trading decisions.  Keeping your capital in a Cash Allocation/Position is often the easiest and safest way for you to ride out volatile downside price trends and allows you to re-deploy your cash into new trades when the time is right.

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Stock-Markets

Thursday, May 13, 2021

Stock Market Bulls Getting Caught in the Whirlwind / Stock-Markets / Financial Markets 2021

By: Monica_Kingsley

Seemingly uneventful and tight range day in S&P 500 gave way to extraordinary selling once the 4,220 intraday support broke – extraordinary by recent standards. The bulls obviously have quite some damage to repair before thinking about taking on new highs. Prices have moved back into the prolonged consolidation, in what isn‘t a true breakdown though yet.

Neither the smallcaps, nor the emerging markets, let alone S&P 500 fell on sharply rising volume, which speaks in favor of a bad day, chiefly driven by tech (yes, I‘m looking at you, $NYFANG) and weak credit markets. Look at market breadth – new highs new lows stunningly rose yesterday in spite of the 500-strong index losing quite a few dozen points.

Classic risk off positioning, if only the defensives as a group did a lot better – but it could have been worse had commodities joined in the melee. They didn‘t, and they are thus the dog that didn‘t bark, detracting credibility from yesterday‘s stock market plunge (unless they catch up next, that is).

Both copper and lumber reversed, but won‘t this turn out as another buying opportunity, especially in copper? Little has changed in the reflationary and reopening trades – financials managed to shake off the rising yields easily yesterday. True, VIX and put/call ratio aren‘t painting a picture of calmness, but especially the option traders are positioned a bit too bearishly at the moment. Again, it‘s a question of how long before the tech bottom hunters step in. Make no mistake though, growth is going to keep lagging behind value.

Gold, silver and miners are in a vulnerable position even though neither the technical nor fundamental reasons behind their rally changed. The rising yields are a testament of rotation out of stocks into bonds not having worked yesterday, and should commodities such as copper get hurt again, precious metals would land in hot water likely. Thus far though, no sign thereof – the momentum remains with the bulls overall, and higher time frames confirm that.

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