Monday, November 22, 2010

US and global equity markets lurched to and fro this past week to close essentially flat.Ireland appears to be warming to a European sponsored relief package, China announced an increase in the bank reserve requirement, and Fed Chairman Bernanke aggressively defended his second round of quantitative easing (QE2) policy.

For the week, the Dow Jones Industrial Average (DJIA) gained 11 points (+0.10%)ending the week at 11,203.55. The S&P 500 gained just under 1 point (+0.04%) to close Friday at 1199.73. For the year the DJIA is up 7.4% and the S&P 500 is up 7.6%.

Industrials, Energy, and Consumer Discretionary were the best performing broad sectors last week while Real Estate, Health Care, and Financials brought up the rear. Year-to-date the top three broad economic sectors are Consumer Discretionary, Real Estate, and Industrials while Utilities, Health Care, and Financials remain at the bottom.

The MSCI (EAFE) World Index gained 0.6% on news that Ireland was moving towards accepting aid from the European Union (EU). Latest reports indicate that aid could be in the €50 billion ($68 billion) range. Concerns are mounting that Irish banks are facing ever-growing losses from real estate related debt. China announced, not unexpectedly, on Friday that it was increasing the bank reserve requirement from 17.5% to 18% in an effort to pull money out of their economy to stem rising inflation. China and India were the worst performing countries last week with Ireland, Israel, and Austria the best. For the year, Thailand, Peru, and Indonesia remain the strongest performers while Spain, Ireland, and Italy continue to be the weakest.

The Euro fell slightly last week to $1.3686 from the previous Friday's close of $1.3692. The US dollar's recent strength may come as a surprise to many in light of the Fed's QE2 policy, but it reflects concerns over the longer-term issues surrounding European debt problems. I will discuss this issue in greater detail below.

Oil prices fell $0.40 per barrel closing at $81.60. Gold continued its recent weakness falling another $16 per ounce (-1.2%) to close at $1353.40. Like equities, commodities in general ended the week flat.

US treasury yields fell (bond prices increased) Friday after Mr. Bernanke's remarks defending QE2, but in general bond prices continue to be weak. On Friday the 10-year yields closed at 2.8750%, up from the previous week's close of 2.7889%. Many pundits are scratching their heads over the recent surge in interest rates following the Fed's announcement on November 3rd of additional bond purchases in the open market. But the fact is, rates are rising. Especially hard hit have been municipal bonds and emerging market debt. A number of bond managers I follow have recently commented on the deteriorating muni bond market and their consensus is that the problems are supply-driven and not credit quality related. State and local governments are rushing supply into the market to take advantage of historically low rates, to issue bonds under the Build America Bond program which ends at the end of the year, and because the two-year moratorium permitting AMT tax-free private activity bonds is also expiring at year's end. This supply imbalance is forcing issuers to offer higher interest to attract sufficient buyers. I remain skeptical of this view and believe that there are a lot of states that have serious debt issues including Illinois and California. Emerging market bonds have been hurt by a rising US dollar.

THE US DOLLAR, EURO, AND IMPACT ON INVESTORS

The recent strength of the US dollar is confounding economists. Like all other goods currencies are in essence a good to be bought and sold on the open market), when demand for a particular good increases, so does its price. Investors around the world have been buying US dollars at a greater rate than the Euro and most other currencies.From a technical standpoint, my indicators are suggesting that this relationship can continue for the short-term. However, the longer-term outlook is not as strong.Economists are correct in their concern for the strength of the dollar as the Fed continues to print money to buy our debt. Mr. Bernanke made it very clear on Friday that his overall objective is to help a weak US economy recover and to spur employment. He did acknowledge that a weaker US dollar could result, but he places the blame for much of the US dollar's weakness on countries like China that are manipulating their currencies to keep them artificially low.

While the Fed's monetary policy may contribute to a weaker US dollar, I continue to see problems in Europe as the main determinant in the strength of the US dollar. Ireland will be forced to take aid to stem its banking crisis. I mentioned that the aid package could total $68 billion; however, European financial leaders are uncertain about the final amount. Fallout from Ireland has forced other weak EU countries to pay more for their debt. Spain had a successful bond offering this past week, but at rates higher than they would have preferred. Greece is still a mess, Italy is a mess, and Portugal is a mess. Higher rates put more and more pressure on the solvency of these governments, and the long-term outcome could be insolvency and restructuring. Bankruptcy for short. The situation in Europe reminds me of the tale of the little Dutch boy who averts a crisis by sticking his finger in the dyke to stem the flow of water while awaiting help. In the tale help comes just in time to prevent a catastrophe, the question now is whether or not enough help can arrive to stem the leaks currently flowing from the European debt dyke. Should the worse-case scenario play out, it will be a huge global economic mess. While I do not see this happening in the next couple of years, and it may not happen at all, it must be watched along with the Euro/US dollar relationship.

To the investor, a rising US dollar favorably impacts on US stocks (small and mid caps outperforming large caps), US bonds, and growth stocks. A falling dollar favors non-US stocks, commodities, gold, international bonds, and value stocks.

The technical indicators I follow help provide insight as to what is happening and I will certainly keep all of you apprised of this important issue.

Looking Ahead

A news story that is certain to draw attention in the coming weeks follows an announcement by Federal investigators late Friday that they are nearing the completion of a 3-year insider-trading investigation that, according to an article by the Wall Street Journal, "could eclipse the impact on the financial industry of any previous such investigation." The article states that the investigation centers on more than 30 investment banks, hedge-funds, and expert-network firms. Expert-network firms specialize in providing institutional clients the most up-to-date information about a specific industry and potential deals within that industry. The most well-known name mentioned in the Wall Street Journal article was Goldman Sachs who is under investigation about Abbott Laboratories' take over of Advanced Medical Devices in January 2009. It is doubtful that the market will react broadly on Monday to this news because the investigation focuses primarily on mergers and takeovers from 2007 to 2009; however, individual companies may be hurt and there could be erosion of investor confidence which is already weak. This will be a story I will be following with great interest.

It is too early to say that the recent correction in equity markets is anything more than the normal ebb and flow of the markets. Nearly all of my technical indicators had most stocks, bonds, and commodities in an overbought status. As of the market's close on Friday, many indicators have returned to more normal levels.

The New York Stock Exchange Bullish Percent (NYSEBP) fell last week to 73.71 down from the previous week's close of 75.58. I continue to watch this critical indicator closely for signs of a breakdown. A score over 70 indicates an overbought status of US stocks and that risk levels are high, but does not indicate when a major sell-off may occur. US and International stocks are favored. Commodities remain strong. Bonds appear to be under continued pressure going into next week, but not to the point of reducing current bond allocations at this time. Longer-term municipals and international debt are showing the greatest weakness right now.

Small and mid-capitalization stocks continue to be favored over large caps. Equal-weighted indexes (which will include more mid cap stocks) remain favored over capitalization-weighted indexes. Emerging markets remain favored over developed. China must be watched carefully as investors shy away while the Chinese government takes steps to slow the overall economy in an effort to curb inflation.

This week is a shortened trading week. The markets are closed on Thursday in celebration of Thanksgiving and will close at 1 PM on Friday. As we gather with family and friends this Thanksgiving, I want to extend my sincere hope that you are able to share this holiday with those you love and hold close. I ask that we all take a moment and remember those great soldiers, sailors, marines, and airmen that are unable to be home with their families as they defend each and every one of us.

Happy Thanksgiving!

Corporate bonds contain elements of both interest rate risk and credit risk. Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest, and if held to maturity, offer a fixed rate of return and fixed principal value. U.S. Treasury bills do not eliminate market risk. The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income.

As always, if you have any specific questions on your portfolio or wish to talk to me, please do not hesitate to call.

P.S. If you think this type of analysis would be of benefit to anyone you know, please share this communication with them.

Sincerely,

Paul Merritt, MBA, AIF(R). CRPC(R) Principal NTrust Wealth Management

Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be obtained. Technical analysis is just one form of analysis. You may also want to consider quantitative and fundamental analysis before making any investment decisions.

Information in this update has been obtained from and is based upon sources that NTrust Wealth Management (NTWM) believes to be reliable, however NTWM does not guarantee its accuracy. All opinions and estimates constitute NTWM's judgment as of the date the update was created and are subject to change without notice. This update is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities must take into account existing public information on such security or any registered prospectus.

The bullish percent indicator (BPI) is a market breath indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group. The basic rule for using the bullish percent index is that when the BPI is above 70%, the market is overbought, and conversely when the indicator is below 30%, the market is oversold. The most popular BPI is the NYSE Bullish Percent Index, which is the tool of choice for famed point and figure analyst, Thomas Dorsey.

All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2, 5, 10 and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S.stocks traded on the major exchanges around the globe.

Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser.

Tuesday, November 16, 2010

US and global equity markets pulled back this past week as investors digested the effects of QEII, the mid-term elections, the G-20 Summit in Seoul, worries of renewed debt problems in the Euro Zone, and a flash of inflation from China.

For the week, the Dow Jones Industrial Average (DJIA) lost 251 points (-2.20%) ending the week at 11,192.58. The S&P 500 lost 57 points (-2.17%) to close Friday at 1199.21. For the year the DJIA is up 7.3% and the S&P 500 is up 7.5%.

Energy, Consumer Staples, and Consumer Discretionary were the best performing broad sectors last week while Real Estate, Health Care, and Industrials brought up the rear. Year-to-date among the top three broad economic sectors Consumer Discretionary replaced Real Estate as the top performing sector while Real Estate fell to number two and Industrials remained at number three. Health Care, Utilities and Financials remain at the bottom.

The MSCI (EAFE) World Index fell in concert with the US markets losing 2.4% on negative news regarding debt concerns in Ireland and inflation worries in China. Emerging markets fell sharply last week with India, Australia, Brazil and Turkey leading the drop. Japan, Peru, and Chile were the best performers. For the year the MSCI (World) Index is up 3.2%. As 2010 begins to wind down, the top performing countries that I follow have been Thailand, Peru, and Indonesia while Ireland, Spain, and Italy have been the weakest. The bottom three countries should come as no surprise given the underlying fears of a national debt implosion in the Euro Zone.

The Euro fell last week to $1.3692 from the previous week’s close of $1.4032. The Euro has been rising for some time against the US dollar as the Federal Reserve has directly or indirectly maintained a weak dollar policy via bond purchases in the open market. However, this policy was not enough to keep Euro investors from buying US dollars as Ireland’s current financial problem is seen as reaching a critical stage. The European Union (EU) and the International Monetary Fund (IMF) have created a very sizeable reserve for Ireland to draw on if needed; but so far, the Irish have been adamant about not taking the funds to maintain their sovereignty (there are lots of strings attached to any bailout). This story will have important ramifications in the days and weeks ahead.

Oil prices fell $4.85 per barrel closing at $82.00 for a weekly loss of 5.58%. Gold also fell shedding $25.70 per ounce (-1.84%) to close at $1369.40. Commodities were hit especially hard the end of the week as China announced that inflation in that country had reached 4.4%. Investors expect that the Chinese will adopt policies to slow economic growth impacting negatively on the overall demand of natural resources imported by the Chinese. A rising US dollar will also negatively affect commodity prices.

US treasury yields have risen to two month highs as bond owners have been selling bonds following the Fed’s announcement that the Fed would purchase up to $600 billion in bonds. At the very least it appears that profit taking is behind the selloff. The 10-year rate closed Friday at 2.7889% up from 2.5412%. This 9.75% increase in yield is the largest single week move so far in 2010. I believe it is too early to tell if this is little more than profit taking or a shift by investors away from longer-term bonds on fears of impending inflation.

G-20 SUMMIT MEETING IN SEOUL MEETS WITH LITTLE SUCCESS

The purpose of the G-20 is to have the world’s largest economies meet and coordinate global financial policy. When the G-20 met in early 2009 during the midst of the credit crisis, the countries agreed that massive monetary and fiscal stimulus was needed to keep the world from sinking into a depression. All 20 countries acted accordingly and the crisis was blunted. This past week, with the crisis subdued, countries were more focused on their individual interests and the United States stood alone calling for continued massive stimulus to spur economic growth.

Leading up to this meeting, it was evident by the mounting global criticism of Secretary Geithner’s call to curb trade imbalances between exporters and importers that the US position would not prevail in Seoul—and it did not. The Wall Street Journal opined this past weekend that they could never remember an international meeting where a US President and Treasury Secretary had been so thoroughly rebuffed. The problem is quite simple, the rest of the world sees the US as being hypocritical as the President endorses the Fed’s easing policies (QEII) which puts downward pressure on the US dollar at the same time the US is criticizing China on their own currency manipulation. Export growth by the US would come at the expense of other exporting countries and those countries (Germany, China, and Brazil to name a few) are not willing to cut their exports on behalf of the US. Without dominant US leadership, the meeting resulted in little meaningful accomplishment.

THE EUROPEAN DEBT CRISIS AND CHINESE INFLATION

I have already touched on the debt crisis growing in Ireland. The issue centers around growing doubt that the Irish can meet their bond obligations and their commitment to austerity measures. But this is only part of the story. The real fear is that if Ireland falls, then Portugal falls, and then Spain, and so on. Sooner or later there will not be enough Euros to bailout every country. The European leadership understands this, so they are aggressively dealing with the concerns. The question remains—will the EU be successful.

The Chinese announced inflation jumped to 4.4% over the same period a year ago. Investors fear that the Chinese government will act quickly to try to curb economic activity by raising interest rates, cash reserve requirements by banks, or both. These concerns spilled out over most of Asia as many countries had very poor market performance at the end of the week. Commodity prices fell sharply on fears that the Chinese will curb imports of many raw materials. As I write this Update (Saturday night), there has been no announcement by the Chinese government of any policy moves. There may be some further action by the Chinese government in the coming weeks, but the market’s reaction may prove to be based upon speculation and profit taking.

Looking Ahead

At the core of all the economic news this past week, as it has been in other weeks, is the story of an extremely week US economic recovery. Unemployment is 9.6%, GDP growth is around 2%, and the potential for political gridlock in Congress diminishes hopes of any certain turnaround. Inflation looms in the back of everyone’s minds as the Federal Reserve continues printing money at historic rates. My vote right now is for the President and Congress to work together to get this country back to work.

The 2+% drop in markets in the US and abroad may just be profit taking. It may be a pause after the market surge in September and October. One week of activity is not a trend and must simply be watched closely. The New York Stock Exchange Bullish Percent (NYSEBP) actually rose slightly to close at 75.58 for the week. Any level over 70 signals an increase in risk, not imminent market direction. Positions should be entered cautiously here.

US and International stocks are favored. Commodities, hit hard last week, remain strong. Bonds appear to be under a little bit of pressure going into next week. The longer maturities are coming under the most pressure while the municipal bond market has been quietly selling off over the past 30 days or so. The take away here is that security and bond selection is critical. Buy the strongest technical stocks and bonds, and pay attention to them. I believe bonds are a solid holding for many at this time, but I am cautious about new investment in bonds with maturities greater than 10 years. I am focusing on short to intermediate-term bonds. Don’t forget about Treasury Inflation Protection notes (TIPS for short) if inflation begins to emerge.

Small and mid-capitalization stocks continue to be favored over large caps. Equal-weighted indexes (which will include more mid cap stocks) remain favored over capitalization-weighted indexes. Emerging markets remain favored over developed.

Sincerely,

Paul L. Merritt, MBA, AIF®, CRPC® Principal NTrust Wealth Management

P.S. If you think this type of analysis would be of benefit to anyone you know, please share this communication with them.

Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be obtained. Technical analysis is just one form of analysis. You may also want to consider quantitative and fundamental analysis before making any investment decisions.

Information in this update has been obtained from and is based upon sources that NTrust Wealth Management (NTWM) believes to be reliable; however NTWM does not guarantee its accuracy. All opinions and estimates constitute NTWM's judgment as of the date the update was created and are subject to change without notice. This update is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities must take into account existing public information on such security or any registered prospectus.

The bullish percent indicator (BPI) is a market breath indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group. The basic rule for using the bullish percent index is that when the BPI is above 70%, the market is overbought, and conversely when the indicator is below 30%, the market is oversold. The most popular BPI is the NYSE Bullish Percent Index, which is the tool of choice for famed point and figure analyst, Thomas Dorsey.

All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2,5,10, and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S. stocks traded on the major exchanges around the globe.

Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser.

Tuesday, November 9, 2010

US equity markets reached their highest levels in two years following an announcement by the Federal Reserve that it will purchase up to $600 billion in long-term US treasuries through the end of June 2011 in an effort to jump start the economy and inflation causing a surge in commodity prices. Additionally, mid-term elections promise to slow down the high-tax, big government agenda pursued by the last congress; and a higher than expected private sector jobs report buoyed investors.

For the week, the Dow Jones Industrial Average (DJIA) gained 326 points (+2.93%)closing the week at 11,444.08. The S&P 500 added 43 points (+3.60%) to close Friday at 1225.85. For the year the DJIA is now up 9.7% and the S&P 500 is up 9.9% and are levels not seen since September 2008.

Financials, Energy, and Real Estate were the best performing broad sectors last week while Health Care, Consumer Staples, and Utilities brought up the rear. Year-to-date the top three broad economic sectors continue to be Real Estate, Consumer Discretionary, and Industrials while Health Care, Utilities, and Energy have lagged. The strength of the financial sector can be attributed to reports that the Fed may allow healthy banks to resume paying dividends.

The MSCI (EAFE) World Index kept pace with US markets gaining 3.41% for the week. Emerging markets outpaced developed markets as investors continue to take on more risk and as the US dollar continues to weaken. For the year the MSCI (World) is firmly positive up 5.7%. For the week, the top performing markets that I follow were Hong Kong, China, and Australia while Spain, Italy, and Ireland were the weakest. For the year, Thailand, Peru, and Turkey have been the best performers while Spain, Italy, and Ireland have been the worst. The weak European countries cannot shake concerns about their ongoing debt problems.

The Euro continued to gain against the US dollar as the Fed signaled that it would hold interest rates down by purchasing long-term US treasuries. For the week, the Euro closed at $1.4032. The general weakening of the US dollar is having significant ramifications on commodity markets.

Oil prices jumped $5.42 per barrel closing at $86.85 for a weekly gain of 6.66%. Gold closed at $1397.70 gaining 2.96% for the week. The commodity story is not a uniform one. Sugar, cotton, and corn are all subject to the variances of supply and demand as weather patterns influence production and supply; while gold and other precious metals certainly reflect general uncertainty about the US dollar. Oil is certainly influenced by the value of the dollar, but also reflects supply figures and overall expectations of global growth.

With all the news from the Fed about its bond purchase program, US treasuries have remained relatively stable with the 10-year rate closing Friday at 2.5412%. This is only slightly below its close two weeks ago at 2.5624%. I think it is safe to say that the markets had already priced the Fed's announcement into yields.

RAMIFICATIONS OF THE FED'S ANNOUNCEMENT TO BUY BONDS

I have pointed out in previous Weekly Updates that the Fed's program to buy bonds (also known as QE2 for Quantitative Easing Round 2) would boost all asset classes. Stocks because many of the dollars printed by the Fed will find their way into the stock market, bonds because interest rates will be held down, and commodities would gain because of a weak dollar. This has happened and while many investors are certainly happy to see markets and valuations rise, concerns about the direction of US monetary policy is being voiced by leaders from Europe, China, and other parts of Asia. In general, foreign leaders are worried about how the weakening US dollar will negatively impact their exports abroad and create asset bubbles in their own economies. I have also commented about fears of currency wars erupting between countries and there continue to be signs of this possibility. Secretary Geithner is traveling abroad in advance of the next G20 meeting November 11-12 in Seoul and is finding pushback from preliminary meetings with finance officials. Domestically, concerns about the Fed's ability to stoke the economy without losing control of inflation remain as well.

MID-TERM ELECTIONS AND OTHER NEWS

The generational gains by Republicans in the House of Representatives and among state legislatures around the country signals change is coming. I will leave the broad ramifications of what form this change will take to the many, many pundits who comment on such things. What I will say is that there will certainly be a degree of gridlock in Congress and expect the next two years to be a lead up to the 2012 presidential campaign. What I believe we all want is for our government to focus on a healthy business climate and job creation. While the jobs report on Friday indicated an increase of 151,000 private sector jobs created in October, this pace of job creation is very anemic and will not make a dent on overall employment. An unemployment rate stuck at 9.6% will not contribute to the long-term economic recovery of the US. My hope is that Congress and the President will get serious about focusing on government policies that encourage growth, not inhibit it.

Looking Ahead

There was an incredible amount of news that impacted the markets last week. Most of it positive and the markets have reflected that by reaching two year highs.

The New York Stock Exchange Bullish Percent (NYSEBP) closed Friday at 75.07 and is well above the overbought line of 70. What I find interesting is that while the markets have reached two year highs, the NYSEBP is below the most recent high of 82.39 on September 17, 2009. This indicates that fewer stocks are participating in the market's gains and indicates a "divergence" from previous market highs.Remember, this statistic does not say that a correction is certain in the near-term, but it does indicate that the chances of a pull back have increased.

US and International stocks are favored. Commodities are very strong. Bonds are simply treading water (not a bad thing), and currencies are very uncertain at this point.

Small and mid-capitalization stocks continue to be favored over large caps. Equal-weighted indexes (which will include more mid cap stocks) remain favored over capitalization-weighted indexes. Emerging markets remain favored over developed markets and this relationship has strengthened recently.

The Dow Jones Corporate Bond Index and the Barclays Aggregate Bond Index both gained last week, albeit slightly. I believe bonds are a solid holding at this time, but I am cautious about new investment in bonds with maturities greater than 10 years. I am focusing on short to intermediate-term bonds. As cash sloshes around the world, emerging market bonds are becoming attractive.

Risk levels remain elevated. This does not mean that a correction is imminent, but adding positions should be done so incrementally and any pullback would be considered a buying opportunity.

Corporate bonds contain elements of both interest rate risk and credit risk. Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest, and if held to maturity, offer a fixed rate of return and fixed principal value. U.S. Treasury bills do not eliminate market risk. The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income.

As always, if you have any specific questions on your portfolio or wish to talk to me, please do not hesitate to call.

P.S. If you think this type of analysis would be of benefit to anyone you know, please share this communication with them.

Sincerely,

Paul Merritt, MBA, AIF(R). CRPC(R) Principal NTrust Wealth Management

Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be obtained. Technical analysis is just one form of analysis. You may also want to consider quantitative and fundamental analysis before making any investment decisions.

Information in this update has been obtained from and is based upon sources that NTrust Wealth Management (NTWM) believes to be reliable, however NTWM does not guarantee its accuracy. All opinions and estimates constitute NTWM's judgment as of the date the update was created and are subject to change without notice. This update is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities must take into account existing public information on such security or any registered prospectus.

The bullish percent indicator (BPI) is a market breath indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group. The basic rule for using the bullish percent index is that when the BPI is above 70%, the market is overbought, and conversely when the indicator is below 30%, the market is oversold. The most popular BPI is the NYSE Bullish Percent Index, which is the tool of choice for famed point and figure analyst, Thomas Dorsey.

All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2, 5, 10 and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S. stocks traded on the major exchanges around the globe.

Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser.