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INFLATION, CRB, Oil Cycle and Rates


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Update: Late-summer.  Gasoline prices in a Downtrend.  XLE, & TYX to follow?

Down to $3.50 level by July4th. Support at $2.75 broken now. TYX, Long term rates are holding Up. also. UNL:

UNL./ Unleaded Gasoline, etc ... YTD: ... 10d/ Last: $2.38, -45% off Yr.High: $4.326

Strong Support near: UNL: $2.75 (broken).  TYX: 2.80, 2.40% / Last: 3.255%, -6.2% off Yr.High: 3.472%

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INFLATION BELLS, with CRB, USO & GLD - Updated Aug.31st

TYX & CRB + "3 Bells" YTD: w/TYX: $32.55= 3.25% . since 2020: UnL.Gaso. broke Uptrend. Rates may too.

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OLD - - Prior Update at July 5th

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GLD / Gold got big push in 2020, after the Covid selloff. And after that rally to $2000+ has mostly traded sideways/down.

CRB-etc caught up and surpassed Gold in 2022.  Now CRB and XLE may be about to slide.  Gold is waiting for a second wind. 

Gold Rally to above $2000 ahead? ... CRB-etc. since 2020: Last: $27.27 x 10.6x-ish = $CRB: $290

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CRB Index, 5 years, Last: 290.41 - 3.17. -1.08%

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CRB is a Commodity index,  mostly Energy,  It may be set to break its uptrend.  It may follow Gasoline lower.  Paradoxically, this could be GOOD for Gold, which in recent year has shown a negative correlation with Oil and Energy.  And moreso, inverse to prices of Gold miners, partly because oil prices are part of mining/extraction costs.

GOLD to CRB got very cheap at r-5.6x ($1845/$329). And the upturn is already underway. 

How long will the upswing last?  It may depend on whether investors prefer Gold to Oil investments.

Date-day  Gold/ $CRB : Ratio :    GLD  /  it:CRB = Ratio ($/it.C
\6.08-W:  1853/ 327.00= 5.67 :  172.78 / $29.19= 5.92 (11.20)
\6.09-Th 1845/ 329.00= 5.61 :  172.23 / $29.25= 5.89 (11.25)
\6.10-F :  1830/ 326.00= 5.61 :  174.54 / $29.27= 5.96 (11.14)
\6.13-M : 1831/ 321.50= 5.70 :  169.93 / $29.06= 5.85 (11.06)
\6.14-Tu: 1818/ 316.00= 5.75 :  168.57 / $29.06= 5.80 (10.87)
\6.15-W: 1824/ 315.00= 5.79 :  170.77  / $28.80= 5.93 (10.94)
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07.01-F : 1802/ 291.83= 6.17  : 168.32 / $26.57= 6.33 (10.98)
07.05-Tu 1764/ 278.16= 6.34  : 164.75 / $25.82= 6.38 (10.77), gold-2.1%, crb-4.7%

Ratio: GOLD-to-CRB: $1802/$292= r-6.17, 103% off r-5.59 Low ($1800/$322)...

GLD/it:CRB: $168.32 /$26.57= r-6.33 vs. low of ($169/$27.00) = r-5.73

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FOUR BELLS... since 2020:  rallying well and long after the "unnatural" collapse in USO in early 2020

HARD FAST DROP in CRB : Last: $278.16. down -15.6% from Yr.H: $329.59

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Mega-Bullish on Gold (and Gold shares) UGL wCrb: YTD: w/GDX: GLD-1yr: UGL 10d:  GLD: GDX 10d.

Gold is now very cheap vs. CRB too - see above: down -63.6% from 16.16x to 5.89x CRB (as Oil etc, rose)

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Gold's L.T. Cup & Handle : Explanations: Handle should end in top 1/3 or upper 1/2

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ALTERNATING RALLIES, GP>OP>GP>OP ... Gold Peaks (GP) versus Oil stock Peaks (OP) ... update :

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UPDATE follows - 7.14.2022

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INDU / DowJones Ave. ...  2019: 1yr: Ytd: 10d / Last: 30,968, R: 29,653- 36,953 ++ spy: iwm: tlt: gdx: xle:

/ Vs.18,740 Rise (100%). At: 29,653 +11,440 (61.0%), At: 29,784 (61.8%), At: 27,583 (50%), At: 25,372 (38.2%)

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INDU / Dow Jones Indu. Average ... since 1970-Mo: v2: 1985: 2000 / Last: 30,967.82, yrL: 29,653.29 to 36,952.65

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1970.v2

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1985: 2000 / Last: 30,967.82, yrL: 29,653.29

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2000-Mo: 2006-Mo: 2006-wk: 2012: 10d / Last: 30,967.82, yrL: 29,653.29

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2006-wk: 2013wk: 2013d: 2019: 1yr: Ytd: 10d / / Last: 30,967.82, yrL: 29,653.29

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==

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A few months after the 2008 crash started, money shifted back into Gold ... chart

And that Gold rally persisted for Two YEARS. pushing Gold up +110% (from $66 to $139)

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I am watching for a Peak in the USD (DXY, yrH: 107.8), as a sign that Gold is ready for its cyclical run-up/ 

TYX, 30yr. Rates too:  TYX vs. DXY, USO, etc. 

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In the 2008-2009 period, GOLD stayed weak until the US Dollar peaked (at $88, in Oct.2008, GLD hit $66, GDX $16) > Chart with DXY

Commodities were on a tear in the first Half of 2022.  But may have PEAKED now.

GOLD Peaked in March 2022 (Gold at $2080, and GLD at 193.3), and Oil and Oil stocks may have peaked in early June.

We may now see the 2009-2010 pattern, with a weaker Dollar, and weak stocks, leading to a strong Rally in Gold.

GLD-etc. ... from Dec.2021 : 2yr: 1yr: YTD: 10d / Last: $162.3,  XLE: $70.95, IT:CRB: $26.80.

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V1: Peter Grandich:  "Junior Research shares have been annihiliated" - L recovery ahead, while Housing crashes 40%?: VIDEO

V2: Lawrence Lepard: The World in Monetary Chaos : Crazy Uganda Gold discovery story, then Markets

GOLD is down because...  Jay Powell has been "channeling Volcker", 

He needs lower Oil prices now to Pivot.  If not, "he will destroy the Economy."

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We have been HERE before.  "The Pause that Refreshes"... Before the Big Round #

Is this Now moment (July 2022) the same as fall 2008?

When Gold paused before its final breakout above $1,000.

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LISTEN to the May 2008 Commodity Watch Radio podcast - think of that as being equivalent to the Gold market in late 2021.

MH interview with DF - Gold discussion portion / CWR pt.1: 1,060 views,  added to my site om May 26, 2008:

"Sentiment is getting very Bearish": Recorded about May 15, 2008 - Gold was $881, GLD $91.23 (10.17x), SPY $137.64, XLE $86.26

After than interview, Gold rallied 12% to just under $1000, $986- July 15th  (Similar to Gold's 15% rally from Jan. to March 2022.) 

Then a sharp fall into a final low of Gold $693/ GLD $66 as falling stocks scared everyone. Starting late 2008, we got a strong Gold Rally.

Is July 2022 like a Deja Vu parallel with Nov.2008 ? Starting late 2008, we got a +110% Rally, lasting 2 Years.

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If so: Gold will rally as the USD falls, and CRB commodities and  stocks may put in a lower Low in the weeks and months to come.

GLD-etc ... 2022-update: GLD-$162.3 /DXY-$106.9=1.52x. /CRB:$26.80= 6.06x, UGL: $52.30 /SPY: $388.7= 13.5%

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Next Gold Rally through $2,000, may be the one that "never looks back", like in 2008-2010.

Ratio: UGL: $52.30 /SPY: $388.7= 13.5%

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GOLD Maybe be hitting Bottom in non-Dollar Currencies

in EUR : Eur 1711 -

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in GBP: 1,448

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"PEAK FED" = means Peak rates "sooner than expected"

Inflation may be about to drop, says David Rosenberg, & "I think Energy prices have peaked"

Imminent Recession – Extended Bear Market  : "stock market Real value is at $31,000". (Low $30k, Last: $31,300)

"But you won't get a rally in the Stock market until the Bond market rallies"

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Switch to Gold when BTC was $35,000... would be working okay by now

BTC-etc.  ... from 7.12.21: 2yr: 1yr: YTD: 10d / BTC: $19,665 /Gold: $1735 = xx,  GLD= $160.  ETHE: $7.93, ETH: $1,065

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YTD: 10d / BTC: $19,665 /Gold: $1735 = xx,  GLD= $160.  ETHE: $7.93, ETH: $1,065

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Gold ($1700/oz) is heading to some important technical levels on the weekly chart 

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> https://www.kitco.com/news/2022-07-15/Gold-1700-oz-is-heading-to-some-important-technical-levels-on-the-weekly-chart.html

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  • 2 weeks later...

STOCKS and CRB - updated : Aug.2, 2022

SPY -etc ... update: add-SLV: 10d / Last: 390.89 - 4.68, -1.2%

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CRB-etc. since 2020: Last: $26.37 x 10.8x-ish = $CRB: $283.7

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SPY, GLD vs CRB ... update:

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Ratio: Gold to CRB: $XXX / $CRB: $283.7 = r- 6.31x

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Ratio: SPY to CRB : $390.89 / $CRB: $283.7 = r- 144%

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GOLD's BOTTOM in PLACE? - came on rarely-used 882d MA (3.5 years)

GLD / Gold ... update: 10yr: 5yr: 2yr: 1yr: 10d / Last:

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10yr: 5yr: 2yr: 1yr: 10d / Last:

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INDU / DJ Industrials - All-L: 10yr ... 882d MA also worked, (=182wk, 476wk, F^2)

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All-L: 10yr ... (=182wk, 476wk, F^2)

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Update : SUGAR vs Soft Commodities

FOOD 2020 : Coffee was the Big winner.  While Cocoa did nothing'

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SUGAR vs. WEAT/ Wheat and DBA/ Agri Comms. ... from Dec2015: 2017: 5yr: 2yr: 1yr: 10d / cc : 17.54, $8.46, 20.19

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Ratio: SUGAR to DBA: 17.54 / 20.19 = r- 86.8%. Using theirs: 0.1754 / $20.19= 0.869%

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Ratio: WHEAT to DBA: WEAT: 8.46 / 20.19 = r- 41.9%. Using theirs: 807.75 / $20.19= r-40.01

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UGL (xx) vs. SPY (xx) and CRB (26.30) : from 2006: 2009: 2016:

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UNL./ Unleaded Gasoline, etc ... YTD: ... 10d/ Last: $2.92, -32.5% off Yr.High: $4.326

Strong Support near: UNL: $2.80.  TYX: 2.80, 2.40% / Last: 2.977%, -00% off Yr.High: 3.472

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TYX & CRB, "Three Bells"...  YTD: w/TYX: $30.32= 3.03% ...  since 2020: Unleaded broke the Uptrend, and Rates may too.

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TLT / Bonds turned Up First

TLT / ... Update ...

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UGL has Opened up a BIG GAP to the upside of GDX... once again, like in Q2.2020

GDX ($27.22) vs. UGL ($55.72), 2x Gold .... update: Falling Ratio: 48.9%

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Ratio: GDX ($27.22) / UGL ($55.72) = 48.9%. "Normal Range" is 50-60%

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==

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DBA may pullback further to $18. 

DBA / Agri.Comms... All: 10yr: 5yr: ... 10d / Last: $19.91, 13.5% off Yr.H of $23.01

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xx

CRB / Agri.Comms... All: 10yr: 5yr: ... 10d / Last: $27.20, XX% off Yr.H of $29.52

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  • 2 weeks later...

SAUDI ARABIA switching sides to work with the BRICS (China and Russia)

Could be CHECKMATE for the US Dollar, ending the period of Dollar dominance

Why Are Central Banks Around the World Hoarding Gold? With Andy Schectman

 

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"Surprise" Drop in Unleaded.  Might be Seasonal... or a sign Americans are cutting back on driving

USO/ Oil and XLE/ Oil shares go on rising

RBOB Gaso.vs. USO, XLE, TYX (LT rates). $2.706 per gallon x42=113.65/ USO: 78.69 , XLE: 84.09. TYX: 32.47

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UNL vs. USO. May 2020: 10d/ UNL: $2.706 per gallon x42=113.65 / USO: 78.69 (WTI: $97.01, 85.4%)=3.43%

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Ratio:  GASO to USO

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Update: Late-summer.  Gasoline prices in a Downtrend.  XLE, & TYX to follow?

Down to $3.50 level by July4th. Support at $2.75 broken now. TYX, Long term rates are holding Up. also. UNL:

UNL./ Unleaded Gasoline, etc ... YTD: ... 10d/ Last: $2.38, -45% off Yr.High: $4.326

Strong Support near: UNL: $2.75 (broken).  TYX: 2.80, 2.40% / Last: 3.255%, -6.2% off Yr.High: 3.472%

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INFLATION BELLS, with CRB, USO & GLD - Updated Aug.31st

TYX & CRB + "3 Bells" YTD: w/TYX: $32.55= 3.25% . since 2020: UnL.Gaso. the Uptrend. Rates may too.

nbIFh9m.gif

OLD - - Prior Update at July 5th

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GLD / Gold got big push in 2020, after the Covid selloff. And after that rally to $2000+ has mostly traded sideways/down.

CRB-etc caught up and surpassed Gold in 2022.  Now CRB and XLE may be about to slide.  Gold is waiting for a second wind. 

Gold Rally to above $2000 ahead? ... CRB-etc. since 2020: Last: $27.27 x 10.6x-ish = $CRB: $290

B1F8uUS.gif

CRB Index, 5 years, Last: 290.41 - 3.17. -1.08%

Rzcfdeb.png

CRB is a Commodity index,  mostly Energy,  It may be set to break its uptrend.  It may follow Gasoline lower.  Paradoxically, this could be GOOD for Gold, which in recent year has shown a negative correlation with Oil and Energy.  And moreso, inverse to prices of Gold miners, partly because oil prices are part of mining/extraction costs.

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RATIO: Gold to CRB

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BUY BONDS, say two experts, who usually get the market right

TLT / Treasuries, Long Term ... since 2016: Last: $111.88, YrL: $108.12

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TMF : 3x Bull on Bonds... update: Last: $11.37.  YrL: xx. YrH: xx ( 10.50 to 32.435 )

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Raoul Pal & David Rosenberg: The Two-Year Recession

No soft landing, thinks Rosenburg,  and the Fed may not stop pushing ST rates up until Q1-2023.

The economy is already in recession, he thinks.  The low in equities might come 2/3rd thru 2022-23,

so Second Half of 2023.

Meantime, the weak economy will help Bonds, even if short term rates go a little higher.

 

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RATIO of Gasoline-to-TYX (long term rates) is hitting an extreme

As Gasoline Slides. Long term rates rise.  Weird discrepancy.

I bought CALLS on Bonds yesterday, after I saw the opening gap down in TLT/Bonds to $109, vs. yrL: $108

UNL./ Unleaded Gaso., vs.TYX etc ... YTD: ... 10d/ $2.38, -45% off Yr.H: $4.326 / TVX: 33.74 +1.19, YrH: xx

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RATIO of Gasoline-to-TYX

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TLT / Treasuries, Long Term

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Brief comment from Martin Roberge (Canaccord analyst):

Bonds (OW, +2%) – head and shoulders pattern? The bond market has long been mispriced, projecting Fed cuts in H2/23 and Fed funds much below those of the Fed’s dot plot. Fed Powell has now set the record straight and dashed hopes of a pivot. As result, December 2023 Fed fund futures have closed the gap with December 2022 futures (hence unwinding rate cuts) and are only ~20bps away from the 3.8% mean projected by FOMC voting members. This means that bond yields may be approaching another cyclical top considering that through past recessions, US 10-year bond yields traded as much as 75-100bps below Fed funds.

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NEW LOW in TLT / Bonds

TLT / 20+ Year Treasury Bond ETF ... ALL: Last: $107.49, -2.73, yrL: 107.42 -yrH: 152.85 (x1.42: +42%)

/ TYX : 3.48% +0.134, +4.1% = TMF : 10.12 yrL: 10.09 -yrH: 32.33 (x3.20: +220%)

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TLT - 10d : tu: x,  wed: x

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Sym, Open :   High  :   Low  :  Close :   chg.,   Pct.
TLT :
Tue.: 108.90: 108.97:  107.42: 107.49: -2.73, -2.48%
Wed: 108.32: 109.48: 108.21: 109.19: +1.70, +1.58%
TMF :
Tue.: $10.52: $10.54: $10.09: $10.12: - 0.80,  -7.33%
Wed: $10.33: $10.66: $10.31: $10.59: +0.47, +4.64%
Mult.: 10.49x: 10.27x:  10.31x:  3.62x,  2.94x

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TLT - 5yr

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Compare. TLT, and US HomeBuilder index

TLT vs. XHB (Home Builder Index, Pulte Homes) ... update: $107.49 (3.48%), -3.5%. 58.77 -1.0%

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JURY Is Still out  - Will Resistance Hold at 3.5% Yield?

TYX / CBOE 30 Year Treasury Bond Yield Index ... All: 5yr: 2yr: 1yr: YTD: 10d / Last: 3.406% -0.076%, yrH: 3.488%

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CRB may be weakening, about to break uptrend

CRB-etc. since 2020: Last: $26.59 x 10.4x-ish = $CRB: $290 > $276.52 - 6.11

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TMF / TMF : 10.12 yrL: 10.09 -yrH: 32.33 (x3.20: +220%)

xx

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