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MomentumOptionsTrading.com Weekly Wrap for 11/07/10

3:45pm (EST)

1.  Market Summary

2.  Momentum Stocks Still Worth Watching Part 2     

3.  Las Vegas Sands Continues Surge

4.  Earnings

5.  Week Ahead/ Updates (Green Mountain Coffee Roasters, Video)    

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1. Market Summary

We knew last week there was a good chance of the bulls breaking through resistance and they did it in style.  Despite some rough waters, which included earnings, the Fed, and the midterm elections, the market finally soared past resistance last Thursday and ended the week on a high note.

The Dow finished Friday on a 6-session win streak by adding 9 points to settle at 11,444.  The index closed above our 11,200 target on Wednesday and added over 200 points on Thursday as the blue-chips powered their way past their previous 52-week high of 11,258.  This resistance level had also been tested intra-day before the breakout several times and we said to watch for Dow 11,500-11,600 on a break above these levels.  The high was 11,451 on Friday and if we can get into the next zone, Dow 12,000 could be a reality.  Support is now at the previous highs with 11,000 serving as strong support.  For the week, the Dow was up 325 points, or 2.9%.

The S&P 500 gained 5 points to finish the week at 1,225 and easily took out our two targets of 1,200 and 1,220 on the way up.  The index closed just under 1,198 on Wednesday which gave us a clue the breakout was imminent.  We outlined 1,250 as possible short-term resistance if we cleared these hurdles but we still see 1,300 coming into play.  The S&P tacked on 42 points, or 3.6%, for the week with support now being 1,200 and then 1,170-1,175. 

Believe it or not, the Nasdaq actually lagged its counterparts and finished flat on Friday (up 2 points) at 2,578.  However, Tech was the first index to close above our “bullish” targets for the market by clearing the 2,500 level in late October.  We factored in fluff and said the Nasdaq could run to 2,600-2,700 on a close above resistance and it hit 2,587 intraday on Friday.  The index advanced 72 points, or 2.9%, for the week and support is at 2,500 and then 2,450.  We also believe Nasdaq 3K is going to come into play down the road.

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2.  Momentum Stocks Still Worth Watching Part 2     

Since August, we have been highlighting certain companies with more in-depth coverage on what they do, but more importantly, we look at the stock and its prospects going forward as we continue to expand coverage our Weekly Wrap.  These stocks are also on Watch List and our goal is to find a good option trade regardless if the stock is going up or down by using call and put options.

Even though we may not recommend a specific trade at the time when we profile a stock, our coverage of these individual companies are a great place to start your research as you begin to build your own trading strategies.  We love to recommend our own trades but we also want you to be a better options trader. 

We have had great success with our new options trading manual, How to Trade Options on Momentum Stocks and our Momentums Stocks Watch List which details dozens of sectors and over 600 companies.  For those that have purchased the trading manual, think of the coverage we are giving these stocks as running addendums to the Watch List.

Last week, we gave you updates on Baidu (BIDU, $108.80, down $1.26), Best Buy (BBY, $44.75, up $1.07), SPDR Gold Shares (GLD, $136.38, up $0.35) and Freeport McMoRan (FCX, $104.85, up $0.95) which jumped $10 and has broke triple-digits since.  We also brought you new coverage of the iShares Silver Trust (SLV, $24.17, up $0.17) and Pan American Silver (PAAS, $31.92, up $0.58) as a way to play silver and both made nice moves.  SLV started Monday at $24 while PAAS was just under $32.

Today, we wanted to do a few more quick reviews on the other companies we have highlighted over the past 3 months and where they are.

In late August, we profiled Mosaic (MOS, $70.78, down $0.26) when the stock was hovering near $58 and said “…we believe shares of Mosaic have more room to run
over the next few months and could easily break above $70 on fundamentals
alone.”

Although shares have reached our near-term price target, we believe this stock is not done going higher.  We have talked endlessly about how agricultural commodity prices have gone through the roof and with the Fed printing money to devalue the dollar, we feel this trend is even stronger than it was two months ago.  Any pullback is a reason to get long this stock as we now anticipate a run to par ($100) over the next 6-12 months.

In early September, we talked about the prospects for the Chicago Board Options Exchange (CBOE, $24.65, up $0.64) when the stock was at $22.  We were looking for more volume in the options markets in September and October and while that didn’t happen then, it is starting to happen now.  We have seen volume pick up on Wall Street in late October and early November and shares have started to move.  CBOE became a publicly-traded company in June and the stock appears headed to $26 where it faces resistance.  However, a break above this level clears the way for a run at $30.

And finally, in early October we highlighted Juniper Networks (JNPR, $34.39, up $0.55) which was trading near $30.  At the time, the 52-week high was $32-ish and we were looking for a breakout.  The company reported earnings a couple of weeks ago and said sales were 23% higher year-over-year with revenue just north of $1 billion.  We continue to like this company and shares are up 7%-8% since we profiled them but we currently have an option trade on Juniper that is up nearly 50%.

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3.  Las Vegas Sands Continues Surge   

Las Vegas Sands (LVS, $51.98, down $0.03) is a casino company that owns and operates casinos in Las Vegas (the Venetian, the Palazzo, and the Sands Expo Center), Macao (Sands Macao, Venetian Macao, and the Four Seasons Macao), Singapore (Marina Bay Sands), and Bethlehem, Pennsylvania (Sands Bethlehem).

While the company may have Vegas in its name, their story is all about gaming in Macao, where they derive 80% of their profits.  A gaming table in Macao does almost ten times the business the same table does in Vegas and all of their recent growth has been towards increasing gaming revenues in the Far East.  The company recently opened their Singapore resort which has been doing great and it showed in their earnings.

Last week, LVS reported third-quarter earnings of $0.34 a share while analysts were looking for $0.23 a share.  Revenue came in up 67% to $1.9 billion versus expectations for $1.8 billion.  The stock jumped over 8% the next day from $41.06 to $44.37, and as you can see, the momentum has been strong since.

Macao revenues were up 28% as their new Singapore property contributed $486 million to the top line.  Vegas is starting to show some signs of life with a 27% increase in revenues.  Part of the Sin City gain was from increased group bookings, which bodes well going forward, but part was due to a string of really good luck for the casino as their win percentage was up 5%.  REVPAR (which is a metric for Revenue Per Available Room and something we cover in our Momentum Stocks Watch List) was up in both Vegas and Macao.  The city of Las Vegas appears to have bottomed at the very least, and gaming continues unabated in Macao and Singapore which is a good sign.

We like this company going forward for a lot of reasons but the main one is the massive potential for Chinese gaming.  However, after the sky-high ride from a 52-week low of just under $15, the stock appears to be fairly valued for the moment.  

The company is expected to earn $1.60 a share in 2011 which gives the stock a forward P/E of 32, a little on the high side.  More importantly, shares hit a 52-week high of $55.47 intraday on Friday, then reversed down to finish below Thursday’s close of $52.01 on almost 3x average volume.  Over 90 million shares traded hands.

Longer-term, we view any sort of pullback as maybe a good opportunity to go long but we would be leery until it comes back down to fill in some gaps. 

The company has repaired the balance sheet and has kept their great properties in Macao during tough economic times and Singapore looks like the next big growth driver for this company.  If you add a Las Vegas comeback into the story then shares might not be undervalued but we would like to see more proof.

A break back to the low $40’s might be worth a second look if we get the opportunity but remember, the stock was near $140 in 2007 so the momentum is there if Friday’s pullback was just a breather instead of a reversal.

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4.  Earnings    

Monday:  AgFeed Industries (FEED, $3.17, up $0.10), Gammon Gold (GRS, $7.11, up $0.07), Healthcare Realty Trust (HR, $24.94, up $0.19), Lions Gate Entertainment(LGF, $7.34, down $0.16), Rackspace Hosting (RAX, $26.46, up $0.33) and Wave Systems (WAVX, $2.42, down $0.02). 

Tuesday:  A123 Systems (AONE, $9.96, up $0.68), Dean Foods (DF, $10.55, down $0.08), Energy Transfer Partners (ETP, $51.45, up $0.26), Fossil (FOSL, $62.22, up $0.97), HHGregg (HGG, $23.48, up $0.75), JA Solar Holdings (JASO, $9.43, up $0.20), NetEase.com (NTES, $41.09, up $1.09), Playboy Enterprises (PLA, $4.91, down $0.04), Starwood Property Trust (STWD, $20.78, up $0.02) and Tyco International (TYC, $38.89, down $0.48). 

Wednesday:  Cisco Systems (CSCO, $24.26, up $0.05), Kelly Services (KELYA, $15.87, down $0.01), Polo Ralph Lauren (RL, $99.62, up $0.29), Rosetta Stone (RST, $23.94, down $0.52), Sara Lee (SLE, $14.71, down $0.09) and Vivus (VVUS, $7.12, up $0.03),    

Thursday:  Caribou Coffee (CBOU, $11.44, up $0.33), eLong (LONG, $20.15, up $1.29), Flowers Foods (FLO, $25.63, down $0.07), Kohls (KSS, $53.30, up $1.38), Siemens AG (SI, $118.03, down $0.60), SunPower (SPWRA, $14.32, up $0.21) and Walt Disney (DIS, $37.20, up $0.17).

Friday:  D.R. Horton (DHI, $11.98, up $0.21), Dick’s Sporting Goods (DKS, $29.75, up $0.05) and JCPenney (JCP, $32.59, up $0.27).

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5.  Week Ahead/ Updates (Green Mountain Coffee Roasters, Video)  

The economic calendar is a little light this week following the heavy dose compared to last.  The government will report on September wholesale inventories on Tuesday while the trade deficit for September will be released on Wednesday.  Friday brings the Reuters/University of Michigan consumer sentiment index which will issue its preliminary reading for November.

As far as other news, last Friday we did a short write-up on SodaStream International (SODA, $31.88, up $1.88), a recent initial public offering (IPO), that we compared to Green Mountain Coffee Roasters (GMCR, $34.63, up $0.75).  We said one advantage the company might have is the fact they sell they own machines but we were reminded by the great people at Green Mountain that they do sell the machines for their K-cups.

Green Mountain owns Keurig and was their first roaster partner making K-Cups for the Keurig system.  Then, in 2006, the company purchased Keurig.

We apologize for the oversight and wanted to remind you that the company is currently offering a chance to win K-cups for life at:

www.PerfectKCup.com

You also have a chance to win a Keurig Brewer every month and Green Mountain gives a box of K-cups away every day.  No, we are not getting paid to say all of this but we wouldn’t mind a box of K-cups!  Since our research was flawed, we owed them some love…

We will also be doing a video tonight for those of you who have purchased our option trading course which should be ready by Monday morning.  We are going to be looking at some possible earnings trades and we will review Boston Beer Company’s (SAM, $81.96, up $8.29) fantastic quarter.  We have been bringing you coverage of this story since shares were under $40.

We will also be showing you a possible trade that we will be releasing Monday morning and why we think there is a chance for a quick double, or a 100% return, from current levels.  Remember, as option traders, we only need a stock to move 5% to get a 100% on the right option.

Special Note:  For those who are interested in our option trading manual, How to Trade Options on Momentum Stocks, but may have more questions, call or email us.  We will also be happy to work out a payment plan if that is what you prefer but the course is already one of the lowest priced in the industry and widely becoming a big hit on the internet.  To view the videos, you must purchase the option trading manual.

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We will be back Monday morning at 9am (EST) with all of the current trade updates and a fresh outlook.  

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Trader Comments:
    I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year of membership rather than the one quarter. Thanks again, and LOVE YOU ALL. REGINA L.

    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help. STEVE T.

    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide. SCOTT H.

    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485 PETER G.

    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming. LAWRENCE O.

    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again! C.J.

    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace! SHAUN

    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good profitable calls. Keep up the good work. MICHAEL K.

    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!
    PARAG P.

    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN. JAY P.

    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You. MIKE

    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks. TRISH D.

    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock! MIN L.

    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you! JOE G.

    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming. GREG F.

    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade. NOEL

    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today. TODD F.

    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you! PAUL H.

    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ” NOEL

    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.” CHRISTIAN

    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.” JOHN

    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.” CHARLES M.

    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.” BRYAN C.

    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.” JOHN H.

    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.” JEFFREY

    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.” ED

    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.” GREG

    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.” KEN

    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.” GARETT

    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.” TERENCE

    Jan. 31 2012
    Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

    3/18/11
    Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

    2/3/12
    Hi Rick,

    I will start off with a thank you for your time and dedication to all
    the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

    Hi Rick,

    I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
    at finding winning trades. I have attached a copy of the trade from
    my brokerage screen.

    Hi Rick,

    Wow!! my account it up 70% since i joined last month and market is going the opposite direction. Really appreciate your service. I just wanted to drop a note to say THANK YOU. Hope to be with you guys for a very long time. Mel

    Rick,

    Great call on Fosl I bought the may 120 puts for 3.70 yesterday morning just sold for $32.00 today
    Keep up the great work
    Thank you, Henri

    Rick –

    I bought 10 Deckers Outdoor (DECK) May 55 puts at $0.50 on 4/26/12 and sold them on 4/27/12 for $1.65. I made $1150 in one day. Thanks. I knew something good would happen sooner or later.
    HOW THE HECK did you know Green Mountain Coffee (GMCR) was going to go down 20 points???!!!! I bought 10 of the May 35 puts at $0.49 and then 5 more at .30. I sold them at 5.80. Thank you again.
    You have made a believer out of me. Alan

    Rick –
    I have only been a member for about 6 weeks but I have done well on most of the trades. My first two were QQQ and SPY a month ago and since then I've gotten into the groove and been doing well.
    I try to execute the trades that you recommend as soon as you send them out, sometimes I can't and I miss the Entry price. However, sometimes when I miss the Entry, the price goes down and I get a better price.
    That's exactly what happened with GMCR.
    You recommended it at around $.81 I think, but by the time I got to it, the price was $.27. I bought 100 Puts on Wednesday May 2, 2012 and sold half of them 24 hours later at $5.95 for a nice 2,203% gain. As per your recommendation, as GMCR went above $30 I sold the remaining 50 Puts at $5.50 for a slightly less 2,037% gain.
    On average that one trade netted me a 2,120% gain, entirely based on YOUR recommendation (and a little bit of luck). To put this in real terms, I risked $2,700 on Wednesday and pocketed $54,550 just 24 hours later.
    So uhh, let's do that again real soon!!
    Feel free to use my name. The tax guys have me on speed-dial already anyway. Dennis

    Rick:
    That was awesome on your GMCR pick, I know how risky it can been holding into earnings but you pulled it off. 
    I just started my autotrading with you today and am in on your QQQ play. I look forward this service. 
    I have a busy career and I have tried to follow and trade throughout the day and found it too hard. I hope you continue to have a great year, I plan to go along for the ride. I am starting slow but will pile more in once I have secured some profits. 
    Keep up the good work your trading has been spot on. I am sure you paid your dues to get this point in your career. Anthony

    Rick:

    Great call on GMCR!  I have been trading for about 15 years actively.  This may be the best trade I ever made.  Got in on Monday, April 30 and the stock was up from when you recommended it.  It went up further after I got in.  Here are the facts:
    Monday, April 30th: Bought 15 June 37's at $1.25= $1900 approx
    Thursday, May 3rd: Sold 15 June 37's at $9.30=$13,950
    Gain for the week: $12,050.
    I understand you will not get them all right.  It’s important to ride those winners and as you could tell from my selling price, I sold when the stock went to $28.10, so left a little on the table.  Who can complain.
    Keep the suggestions coming, looking for another jump on your FSLR, one that I have been riding very hard.
    Best regards, Bob
      

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