Markets posted gains for the second week in a row. Bonds have come under pressure.

The Dow Jones Industrial Average (DJIA) gained 15 points (+0.14%) and the S&P 500 added 5 points (+0.46%) to extend last week's gains. For the year the DJIA is now up 0.33% and the S&P 500 is down 0.50%. Consensus among the financial media attributes gains to growing confidence that a second recession will be avoided.

Biomeds, Drugs and Oil Service were the best performing sectors last week while Semiconductors, Textile and Household Goods were the worst. From a technical standpoint, Real Estate, Telecommunications and Utilities have the strongest scores while Health Care, Financials and Energy are at the bottom. Keep in mind that scores measure longer trends and do not reflect week-to-week changes necessarily.

The MSCI (EAFE) World Index posted a weekly gain of 0.91% outpacing US indexes, but remains down 5.2% for the year. Hong Kong, Sweden and Israel were the strongest and Spain, Belgium and Austria were the weakest of the countries that I follow. Developed European markets trailed the US and most other international regions with the Far East (less China and Japan) generally leading the way. International securities remains one of my two favored asset classes (Cash is the other) while US stocks, Commodities, Fixed Income, and Currencies sit on the sideline for now. Emerging markets remains the favored international category.

The Euro fell against the dollar closing at $1.2677 compared to last week's close of $1.2893.

Gold pulled back $4 an ounce closing on Friday at $1247.10. Gold continues to be a safe haven for investors against the uncertainty in world markets.

Oil added just under $2 per barrel to close $76.54 (+2.6%) from last week's close of $74.60. Oil has held up despite good inventories on hand and a strengthening dollar. I continue to believe that the price of oil is a referendum by energy traders on their global economic expectations.

US Treasuries continued a recent trend of rising rates which corresponds to negative price movement for individual bonds. The yield on the 10-year Treasury rose to 2.7936% from last week's close of 2.7133%.

BONDS IN THE NEWS

For the second week in a row the longer-term treasuries were the worst performing sector of the bond market. Collectively, the broad bond market was down about 0.50% while the long end (20-30 year maturities) was down over 1%. For the year, long-term Treasuries have been the best performing sector of the bond market. Many investors have considered the long end of the Treasury bond market to be highly priced (myself included). Investors have been buying Treasuries at historically low yields as a safe haven from the uncertainty surrounding the markets both at home and abroad. The two questions overhanging the bond markets are 1) whether or not investors will continue to accept extremely low yields or will they demand higher yields, and 2) does the recent rise in interest rates mark the beginning of a trend toward higher rates? The answer to these questions has enormous implications for policy makers, taxpayers, and investors because 60+% of all outstanding US debt matures over the next three years and will need to be refinanced. If rates rise substantially, the cost to taxpayers will be huge and squeeze the federal budget dramatically at a time when the commitment of tax dollars is growing.

For bond investors, higher rates will result in falling valuations. Investors who have poured billions and billions of dollars into bond funds could find their portfolios covered in more red ink. We must keep our eyes on the bond markets and not become complacent.

EUROPE SLIPPING BACK INTO THE NEWS

Concern over the strength of European banks has again come back into the news. When the results of the stress tests on the European banks by the Committee of European Bank Supervisors were released earlier in the summer, the markets were calmed because only 7 of the 91 banks evaluated had to raise capital. European stocks have rallied and the Euro has gained significantly. This debate over the stress tests will undoubtedly continue, but the answer will be found in the performance of the sovereign debt of Spain, Portugal, Italy, Ireland and Greece. This is another issue that must be watched carefully.

On a positive note, global banking regulators met in Basel, Switzerland, this weekend to hammer out new rules regarding reserve requirements for banks. Banking reserves are assets banks are required to hold to offset losses of band loans and other investments. The requirements were raised to 7% from 2% to 4% currently. The US wanted the new rules to take effect in 5 years but ultimately comprised to 9 as the Europeans were concerned that moving too fast could hurt their economies. I believe this is a positive move in the long run because it will help reduce the risk of future bank failures.

Looking Ahead

The coming week is the year's third Triple Witching which occurs when stock options, futures and futures options all expire on the same day. Friday, September 17th, will be the third such "triple witching" of 2010 (the last is in December). I mention this only because Triple Witching weeks have seen higher than normal volatility in markets as measured by the difference between the high and low of the week. Volatility does not care about direction. Over the past 20 years, 13 years have been up and 7 down.

I continue to watch the S&P 500 for a move above 1140 which will be a short-term indicator of strength and break the upper band in place since June.

I continue to prefer mid and small capitalization stocks. I believe large cap stocks paying a strong dividend (greater than the 10-year treasury) are especially attractive because stocks generally do well when interest rates rise. However, if the market becomes more risk tolerant, then these large cap stocks are likely to underperform the small and mid cap segments of the market. If interest rates continue to rise, bonds will lose value while stocks at least have a chance to maintain their values.

Gold is holding its value and is strong on a technical standpoint. Oil appears range bound for now, but I watch both commodity prices closely for trends.

Bonds remain under pressure. I favor corporate intermediate term bonds. High Yield bonds have shown strength in the face of a stronger equity market. International bonds, while a strong performer for the year, are under pressure recently and worth watching.

If you have any questions about the overall relative strength of your portfolio and would like my analysis, please do not hesitate to give me a call.

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.

Markets rallied on signs that the US may be avoiding a second recession.

The Dow Jones Industrial Average (DJIA) gained 297 points (+2.9%)and the S&P 500 added 40 points(3.7%) to break a three week losing streak pushing the DJIA back into positive territory (0.19%)for the year. Positive, or should I say, less negative news on jobs and manufacturing gave investors confidence that the US is not sliding into a second recession. Strongest gains again were found in small and mid capitalization stocks while larger companies tried to keep up.

From a technical stand point, Real Estate, Telecommunications, and Utilities are the strongest sectors. From an absolute return basis, Real Estate, Financial, and Consumer Discretionary were the leaders last week while Utilities, Consumer Staples and Health Care were the weakest. For the year, Real Estate, Consumer Discretionary, and Industrials have provided the best returns. Information Technology, Energy, and Health Care have had the poorest year-to-date. Equal weighted indexes continue to outperform capitalization weighted indexes in the US. This is not surprising given the strength of the mid cap part of the markets.

The MSCI (EAFE) World Index posted a weekly gain of 4.0% continuing a recent trend of greater volatility than US indexes. For the year the MSCI (EAFE) World is down 6.1%. Australia, South Africa, and France were the leaders while Japan, Hong Kong and Taiwan were the worst performers last week. For the year, Thailand, Chile and Malaysia lead the way while Italy, Spain and France have been the laggards of the countries I follow. Emerging markets led over developed countries.

The Euro gained against the dollar closing at $1.2893 from last week's close of $1.2735. For the year the Euro is off 9.9% against the US dollar.

Gold gained another $14.20 (1%) closing the week at $1251.10. Gold continues to be a safe haven for investors against the uncertainty in world markets.

Oil pulled back slightly closing at $74.60 (-0.8%) from last week's close of $75.17. Oil has continued trading within a $10 range between $70 and $80 per barrel. I read one analyst who suggested that oil over $80 per barrel equates to $3.00 for a gallon of gasoline and when gas moves above $3.00 demand drops keeping oil below $80.

US treasuries pulled back on economic news this week. The yield on the 10-year note rose to 2.7133% up from last week's close of 2.6465%. The Friday to Friday close hides the real movement of yields as the 10-year yield fell below 2.5% early in the week. Not surprising, the longer-term treasuries were the worst performing sector of the bond market. Overall the bond market was down slightly for the week as investors gained greater confidence in the stock markets.

JOBS AND MANUFACTURING DATA BOOST CONFIDENCE

At the same time the overall unemployment rate increased from 9.5% to 9.6%, investors were encouraged by the creation of 67,000 private sector jobs in July. The general consensus is that this is a sign that the US economy is not going to slip into another recession. Overall, the job market shed another 114,000 jobs and notably the manufacturing sector shed 27,000 workers. While this may appear to be an encouraging sign in the private sector, one economist said that the US must create 300,000 jobs each month for four years just to regain the 8 million lost in the last recession.

Manufacturing improved last month as measured by the Institute for Supply Management's manufacturing index which rose to 56.3 from July's 55.5. Anything above 50 is considered to be expansionary. Simultaneously, China's manufacturing index also rose to 51.7 from July's 51.2. Investors see this as another sign that the economy is not going to fall off a cliff.

LOOKING AHEAD

Now that the summer holiday season is officially over, traders will be back to work in full force. They will be facing uncertainty, doubts about most things economic, and several trillion dollars are sitting on the sidelines as a result.

To quote Paul McCulley of Pacific Investment Management Company, "The market is schizophrenic. It would be foolish to have a tablepounding view short term on what stocks will do." This sentiment is reflected by the range bound nature of the markets. After breaking below the important support level on the S&P 500 of 1070 briefly, this index regained strength to close just above 1100-right in the middle of the current range. A move above 1140 will push through an intermediate point of resistance and be an encouraging sign. The DJIA's push above 10,400 is a very positive sign and momentum has turned positive for this index. Overall, my technical indicators, however, remain cautious. I continue to suggest maintaining an exposure to technically strong investments is prudent, but I would not overweight equities until a more sustainable trend is produced.

I prefer small and mid cap stocks over large cap. I do see renewed strength in the larger cap stocks and will watch this trend carefully.

Emerging markets remain preferred over industrialized countries with Thailand and Chile leading the way this year. Two powerhouses from last year, China and Brazil, have both posted negative returns this year and were also near the bottom last week of the countries I follow.

Bonds remain a solid investment. Last week's slightly negative returns reflect the return of higher interest rates. This trend must be watched carefully. Investors are still pouring money into bond funds. According to the Investment Company Institute, for the week ending August 25th, bond funds of all types attracted $5.9 billion while equity funds lost $4.6 billion. For the year, bond funds have taken in over $200 billion while equity funds lost $15 billion. I prefer intermediate maturity bonds and continue to believe that longer term bonds (especially US treasuries) are very expensive.

Last week's rally appears to be based more on investors coming back from double dip recession fears rather than on any solid economic data. The economy is inching along at an anemic pace and something needs to change. Looking over the last few months of the year, I have no doubt that markets will be heavily influenced by the political debate in the coming mid-term elections, and I will be vigilant to look for opportunities that may arise.

If you have any questions about the overall relative strength of your portfolio and would like my analysis, please do not hesitate to give me a call.

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.

Markets rose Friday (August 27th) on news that the 2nd Quarter Gross Domestic Product (GDP) was revised downwards to 1.6% instead of the anticipated 1.4% growth rate. Fed Chairman Ben Bernanke's comments on Friday from the Fed's annual meeting in Jackson Hole, Wyoming, also helped.

The news on Friday certainly helped the markets; however the Dow Jones Industrial Average (DJIA) posted another weekly loss of 63 points (-0.62%) for the week closing at 10,151. The S&P 500 lost 7 points (-0.66%) to close the week at 1072. For the month the DJIA is now down 3.01% and the S&P 500 is off 3.36%.

The MSCI (EAFE) World Index posted a narrower weekly loss of 0.22% on little news. The Euro gained slightly closing at $1.2733 from the previous week's close of $1.2705.

Gold gained just over $8 per ounce to close at $1237.90. Oil closed up slightly showing some strength for the first time in a couple of weeks.

US treasuries pulled back and the yield on the 10-year note rose to 2.625% from last week's close of 2.6160%.

FED PLEDGES SUPPORT FOR THE ECONOMY

The seemingly benign data changes from the previous week does not fully capture the market gyrations, especially Friday's jump in stocks of over 1.6% to help the week cut many of the losses from the earlier four days of trading. However, it is difficult to find much solace in the fact that the overall economy is slowing at an alarming rate at a time in the market cycle when the opposite should be occurring. Chairman Bernanke's expression of the Fed's support to do whatever it will take to keep the economy expanding gave the market's an important boost of confidence, but I remain cautious going forward.

Overall, bonds had a slightly negative week as a result of Friday's trading. Hardest hit were long-term US treasuries which had been showing a lot of strength recently. Bonds are priced for long-term weak economic performance and low inflation. Watching interest rates is extremely important in this current market because if rates start to rise, bonds could lose value and surprise investors who think of bonds as a "safe" investment. Nothing can be taken for granted.

LOOKING AHEAD

Markets are going to continue digesting every bit of economic news in these uncertain times. Volatility reflects investors' lack of certainty and they are swayed like tree branches by the prevailing breezes.

From a technical view, both the DJIA and S&P 500 are below support levels. The S&P 500 violated its long-term support line of 1070 last week. This support line had been in place since the market turnaround in March 2009. Last Friday notwithstanding, I believe the markets continue to show considerable weakness and investments should be made in only the strongest technical positions.

International markets and cash are currently emphasized among my broad categories (US Stocks, International Stocks, Bonds, Currencies, and Commodities) with international favoring emerging markets. Asia ex-Japan and Latin America have shown the greatest strength.

Utilities, Real Estate, and Telecommunication Services continue to show the greatest strength recently while Information Technology and Industrials were the weakest. Financials in general were just ok; however, I am concerned about the banking sector as many of the major banks have performed poorly and have low technical scores.

Bonds continue to be solid investments; but as I pointed out in my earlier comments, investors cannot close their eyes to interest rates and must be vigilant to rising interest rates and falling bond prices. I believe that for now that is unlikely to become a trend in the near-term. Gold remains my hedge against uncertainty.

The jobs report on Thursday will again be front and center on investors' minds as an indicator economic recovery.

If you have any questions about the overall relative strength of your portfolio and would like my analysis, please do not hesitate to give me a call.

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 aresubject 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 thebullish 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. Pastperformance 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.

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Mounting evidence of a pending global slowdown weighed on investors' minds this past week as markets continued their broad retreat.

The DJIA lost another 90 points (-0.87%) following the previous week's loss of 350 points. For the month, the DJIA is down 2.40% and is now down 2.06% for the year. The S&P 500 lost 8 points (-0.70%) adding to the 42 point loss a week earlier. For the month, the S&P 500 is down 2.72% and -3.89% for the year.

The MSCI (EAFE) World Index posted a weekly loss of 1.31% again exceeding the rate of loss of the US indexes for the second week (in fairness, the MSCI (EAFE) World exceeded the US indexes in the month of July). For the month, the MSCI (EAFE) is down 2.99% and off 9.48% for the year. Greatest losses last week came from developed countries in Europe including Italy, Spain, Germany and France. The emerging markets generally posted modest gains with Thailand, Chile, Indonesia, and Malaysia leading the way.

The Euro slid slightly against the dollar closing at $1.2705 down from last week's close of $1.2765 following the lead of most European stock markets.

Gold gained just over 1%closing the week at $1229.80. I have stated in previous Weekly Updates that gold has become more of a hedge against uncertainty rather than a hedge against inflation. How else can gold holding above $1200 per ounce be explained as inflation prospects virtually disappear? A great discussion of this topic appeared Saturday (August 21st) in the Personal Finance section of the Wall Street Journal. Jeff Opdyke's article, "Rethinking Gold: What if It Isn't a Commodity After All?" studied the relationship of gold prices and inflation since 1973 and found nearly zero correlation between the two. What he did discover is that gold prices have a higher likelihood to move in the opposite direction to the US dollar. As the dollar gains in strength, gold prices weaken and vice versa. Mr. Opdyke's conclusion for today's economy is that if you think the Fed and the Congress/President can fix the national balance sheet (US dollar strengthens as a result) then gold is overvalued; however, if you do not and the US dollar weakens in the future, then investors will buy gold to protect their wealth. In other words, gold is a hedge against uncertainty-not inflation.

Oil continued its pullback last week. Oil closed Friday at $74.01 down $1.38 (-1.83%) from the previous week's finish. There is little to add to this narrative that has not already been said. Oil has become a proxy of anticipated global economic growth. With growth forecasts dimming, the price of oil continues to fall. Not surprising, energy stocks have mirrored this decline.

US treasuries continued to rally. The yield on the 10-year note fell to 2.6160% down from last week's close of 2.6788%. The best performing sector of the bond market was in the 20 and 30-year US treasuries. The 30-year US treasury now yields just 3.66% signaling that bond buyers are growing bearish on the longer-term prospects of growth and worries about inflation are low. This is a significant change in outlook when shorting (betting against) the longer term bonds seemed like a winning proposition at the start of the year.

INCREASE IN JOBLESS CLAIMS OFFSETS GAINS FROM MERGER AND ACQUISITION ACTIVITY

New claims for jobless benefits increased to 500,000 for the week ending August 14th, the highest level since mid-November 2009. The announcement on Thursday morning sent markets down and that sentiment continued through Friday's market action. This report raises concerns about growth for the rest of this year and into 2011. This negative news offset a bounce earlier in the week coming from a flurry of announcements about takeovers by some high profile companies.

Intel wants to buy McAfee for $7.7 billion in cash. BHP Billiton wants to buy Potash for $39 billion. For the week some $85 billion in transactions were announced. Typically the purchasing company offers a premium of the current stock price causing those stock prices tojump immediately to match the current offer on the table. Sometimes the stock price rises further if investors believe a bidding war will start or the company being purchased is perceived to have some leverage to extract a higher price for its shareholders. All of this tends to be a positive for the markets. I believe this reflects a belief by cash rich companies that this is a good time to pick off some distressed-priced companies. Potash traded at $230 per share in June 2008 and was trading around $112 per share prior to the buy offer and closed Friday at $149.67. This puts a speculative undercurrent into the markets that generally equates to a move up across the board. Unfortunately, this does not necessarily equate to a stronger market ahead nor was the news enough to overcome the jobless report.

EUROPE CONTINUES TO STRUGGLE

The recent pullback in European stocks followed a generally negative outlook in Europe. French President Sarkozy announced that his government's expectation for GDP growth in 2011 will now be 2.0% compared to 2.5% previously. Mr. Sarkozy reiterated his commitment to meeting spending cuts by the federal government to just 6% of GDP. Greece announced that the government would implement a package of tax increases and spending cuts in order to meet IMF guidelines for assistance. Greece's actions are pretty much the choices most spendthrift governments are or will be facing in the future. The economic impact of such policies tends to be slower than normal economic growth and higher unemployment.

Looking Ahead

The summer holidays continue and most Americans are trying to squeeze in vacations and time at the beach before school starts. There is a relatively light economic calendar for the upcoming week. The regular reports like housing starts (Tuesday) and Initial Jobless Claims (Thursday) are on tap. Thursday will also include a report on leading economic indicators and speeches by two Federal Reserve governors: Evans from Chicago and Bullard from St. Louis. Mr. Bullard's comments are always anticipated as he continues to be the lone dissenter on the Fed's current direction of US monetary policy. The Real 2nd Quarter GDP figures will be released on Friday. Real GDP is growth adjusted for price increases. In other words, what is the growth of the economy without the impact of higher prices?

The DJIA will warrant watching closely. The current support level of 10,050 is within reach. A break below this level will certainly raise concerns. The S&P 500 is right at its current support level of 1070 and a move lower will likewise add to concerns about the strength of the US markets. For the year, the small and mid cap stocks have been the stronger performers, but I am starting to see a shift towards the larger cap stocks over the past 30 days. I believe this reflects a more defensive posture being taken by investors, and also a desire to seek dividend income. Telecommunications/Communications, Utilities, and Real Estate continue to be among the stronger sectors. Energy, Financials and Health Care continue to be weak although Health Care has recently shown some slight signs of positive strength.

Developed international markets continue to struggle after a brief period of growth in July. Emerging markets continue to reflect the strongest relative strength abroad. Latin America and the Pacific/Ex-Japan areas are the strongest of the emerging markets.

I continue to believe that bonds remain a solid holding for investors. The performance of US treasuries is unmistakable, but I am beginning to wonder how much more strength can be squeezed out of the shorter end of the yield curve (2-year yield is 0.49%) so I am neutral about the US treasury sector. However, bonds are holding their value and are expected to do so for the time being. I recently saw an article written by Jeremy Siegle (Wharton Business School) describing the current bond bubble. His point was that bonds are overpriced and poised to collapse in value. I don't disagree with his basic premise, yet he could not answer the one critical question-when? If and when interest rates begin to rise, we will need to make adjustments to bond portfolios.

Gold remains my hedge against uncertainty.

If you have any questions about the overall relative strength of your portfolio and would like my analysis, please do not hesitate to give me a call.

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.

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The US equity markets posted strong gains in July as 2nd quarter corporate earnings reports come in strong despite economic data suggesting slowing growth.

For the month of July the Dow Jones Industrial Average (DJIA) gained 690 points (+7.06%) closing at 10,466. The S&P 500 kept pace gaining 71 points (+6.88%) closing at 1102. For the year the DJIA is up 37 points (+0.35%) while the S&P 500 is down 13 points (-1.2%) from its 2009 close. This past week the Dow gained 40 points and the S&P lost 2 points.

The MSCI (EAFE) World has continued to outperform the US indexes gaining 9.2% in July and is now down 6.7% for the year. The Euro closed the month at $1.3045 the first time the currency has closed above $1.30 since the end of April.

US treasuries closed Friday at 2.9052% a slight drop from last Friday's close of 2.998%. In addition to the gain in treasury prices for July, corporate bonds also posted small gains. Bond yields in general are reflecting a low expectation of inflation for the near term and can also be interpreted as suggesting growing confidence in the ability of companies to meet future debt obligations on the corporate side. As inflation continues to remain low, there have been a few voices that have come out this past week expressing concerns of deflation. St. Louis Fed Chairman, James Bullard, said there was a possibility that the US may be entering a period of slow growth and deflation-similar to what Japan has experience over the past decade. While most observers see a small chance of this occurring, it is something to watch closely. Deflation is particularly troublesome because consumers postpone purchases in anticipation of lower prices. This makes it more difficult for companies to generate profits and will have an adverse impact on stock markets.

Gold continued to lose ground and closed down for the week another $4 closing at $1183.90. Friday did see about a 1% jump in gold prices as buyers stepped in to take advantage of lower prices and as a hedge against softer economic growth. As I stated last week, I believe that gold can continue to be held in portfolios as a hedge against uncertainty.

Oil prices continued to bump along and ended July just about where it started the week at $78.95. Oil trading in Asia ahead of tomorrow's market open in Europe and the US has pushed the price up to $79.30. Analysts believe that this is due to some belief in moderate economic growth and the continued weakening of the US dollar.

CONTINUED STRENGTH IN STOCK MARKETS DESPITE MOUNTING DATA SUGGESTING A SLOW ECONOMIC RECOVERY

As I previously stated, July was a strong month for stocks in general.

I noted a number of factors last week about why I remain cautious regarding the markets and Friday's GDP report of 2.4% growth for 2nd quarter and a reduction of previous GDP numbers confirmed what the less than upbeat data reflected. Additionally, the weekly jobs report did little to give any hint of improvement in this important indicator; and consensus for July unemployment (report will be released this Friday morning) is for an increase to 9.6%. That being said, the markets are showing strength and have effectively shrugged off any negative economic news.

China released its manufacturing data today showing continued moderation. Their index works much like the US index and indicated a slowing in the rate of growth, but still expanding. As I write this, major Asian markets are all positive indicating that investors are now comfortable with moderate growth-in other words, the economies are still expanding albeit at a slower, but hopefully, sustainable rate.

LOOKING AHEAD

My major market indicators continue to favor Cash and Fixed Income and the New York Stock Exchange Bullish Percent (NYSEBP) gained 5% to close July at 53.34% with demand still controlling. With the NYSEBP at mid-field (from a range of 0% to 100%), the markets can be considered to be in a fairly neutral position. However, caution must still be exercised because Cash and Fixed Income are still showing greater relative strength to stocks.

I do believe that equity positions can be taken prudently and I am certainly doing so now. If and when stocks become favored, allocations will be increased. My focus remains on investments that reflect strong relative strength characteristics such as emerging markets, small and mid cap stocks, real estate, and fixed income.

For bonds I continue to favor high quality corporate notes and foreign sovereign debt. High yield bonds are attractive as they correlate to the stock market as well; and as investors become more confident in the economic outlook, they will accept greater risk with lending. One point of caution...small and mid cap stocks, emerging markets and high yield bonds all tend to have higher volatility than large cap companies and investment grade bonds. So keep that in mind as portfolio values surge up and down in the daily battle between the bears and bulls. Do not take on more risk than you are comfortable with.

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.

The Weekly Update is back after missing the past two weeks due to illness and an unforgiving travel and work schedule. Over these few weeks the markets around the world have shown strength coupled with continued volatility.

For the month of July the Dow Jones Industrial Average (DJIA) has gained 650 points (+6.65%) closing at 10,425. The S&P 500 has kept pace gaining 72 points (+6.98%) closing at 1103. For the year the DJIA is essentially flat (down 3 points from its 2009 close) while the S&P 500 is off just over 1% (12 points below its 2009 close).

The MSCI (EAFE) World has continued its recent out performance of US indexes gaining 7.6% in July and cutting its 2010 losses nearly in half. For the year the MSCI (EAFE) is down just over 8%. The Euro also improved against the dollar closing Friday at $1.2904 up nearly 6 cents for the month. Both the MSCI (EAFE) World and the Euro slowed noticeably this past week leading up the widely anticipated release of the European Union's (EU) stress tests on the major banks. Those results were released early Friday evening in Europe and I will discuss them further below.

US treasuries have traded in a very tight range and closed Friday at 2.998%. As equity markets recover from their recent lows, it would be normal to see interest rates rise as investors reduce their "safe" holdings in treasuries and shift to more risky stocks. By remaining under 3% for now, investors are indicating that there may still be some leeriness about a more substantial return to stocks. US corporate bonds saw very small declines in their returns over the past week but are still showing positive growth for the month. If the strength in equity markets persists, expect most bonds to continue to slip. Two exceptions to this trend would be in high yield and international sovereign debt funds.

Gold pulled back early in the month but steadied somewhat last week. An ounce of gold settled on Friday at $1187.80 as European debt jitters eased and Fed Chairman Bernanke continued to forecast slower than expected growth easing inflation fears. Gold can continue to be held in portfolios as a hedge against the unknown.

Oil has continued to rise in July closing at $78.98 per barrel on Friday. The gain in oil prices has trended to move with the equity markets as oil traders see a stronger stock market as a proxy for future demand for oil. However, some analysts are voicing concerns that this link is breaking down as inventories rise faster than demand. Questions remain about whether the recent rise in stock markets is signaling a true recovery and the return to more robust economic growth and thus demand for oil.

RENEWED STRENGTH IN STOCK MARKETS

July has been a very good month for stock markets. The most oft cited reasons for this has been the strong 2nd quarter earnings reports from US companies and the improved debt outlook in Europe. I share this enthusiasm tempered with my continued caution.

My caution comes from a number of concerns:

·First, my relative strength analysis of the five major asset categories (US stocks, International stocks, Bonds, Commodities, and Currencies) continue to favor Bonds and by default, cash. When this relationship exists, it is imperative to remain cautious.

·Second, a number of critical economic indicators remain negative or neutral at best. Jobless claims rose last week and overall unemployment is still at 9.5%. The White House's own economists expect the unemployment rate to remain above 8% in the lead up to the 2012 presidential elections. Additionally, new home starts are still far below average as are sales, and reports of rising foreclosure rates does not bode well for growth in this important sector.

·Third, rising federal deficits will become more problematic. This year's federal deficit is expected to be around $1.5 trillion dollars and the federal government is now borrowing 41 cents of every dollar spent. The government will be forced to cut spending and raise taxes to address this issue-not a recipe for growth.

·Finally, keep watching the quarterly GDP numbers. GDP growth between 2% and 3% would indicate the economy is simply marking time, below 2% and greater than 0% would say the economy is not growing enough to sustain itself, while below 0% would be a double dip recession. I am not suggesting that we will fall below 0%, but I believe those economists who are predicting the 2nd half of 2010 GDP growth to fall within 1.5% and 2%.

I do believe that it is possible to take some stock positions but only in the most technically sound investments.

STRESS TESTS RESULTS FROM EUROPE

A highly anticipated event was the release of the EU's stress tests on major European banks.

On Friday those results were published and to many investors' relief, only seven banks failed the stress tests indicating a need to raise a total of €3.5 billion ($4.51 billion) for proper capitalization. This was better than expected and may give European stocks a boost in the weeks ahead.

I am certainly pleased by this news; however, there is always a "but" these days. A number of analysts both in the US and abroad have voiced concerns at just how rigorous the tests were. Their concern centers around the issue that the evaluations did not test the default of any sovereign debt currently held on the banks' books. The risk of sovereign debt default is precisely what led Europe into its current debt crisis and to not test this scenario has cast some doubt on the results.

Looking Ahead

My generally cautious outlook on markets remains in place and I believe that it is better to take a more conservative position and give up opportunity rather than risking the loss of capital at this time.p> Until my major asset category relative strength analysis favors stocks, I will continue to underweight stocks. Remember that investing is not about today and tomorrow, but rather next month and next year. There is a lot of noise out there right now and it is imperative to keep short-term gains and losses in perspective.

With the good stock performance over the past couple of weeks, the New York Stock Exchange Bullish Percent (NYSEBP) has risen to 46.57% meaning that almost half the stocks traded on the New York Stock Exchange are now in a point and figure buy status. Even more importantly the trend now indicates that demand is back in control of stocks. Because of this, I will continue to look for limited exposure to technically strong stock investments.

For now, emerging markets continue to show greater relative strength on the international side. I also continue to favor small and medium capitalization companies over large ones. Growth is preferred over value.

For bonds I favor high quality corporates and foreign sovereign debt. High yield bonds are attractive as they correlate to the stock markets well. One point of caution...small and mid cap stocks, emerging markets and high yield bonds all tend to have higher volatility than large cap companies and investment grade bonds. So keep that in mind as portfolio values surge up and down in the daily battle between the bears and bulls. Do not take on more risk than you are comfortable with, and open your statements when they come in the mail.

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.

Weekly Market Update July 5, 2010

US markets continued to slide as economic data signaling slowing growth renewed fears of a second recession at worst or anemic growth at best.

For the week, the Dow Jones Industrial Average (DJIA) lost 457 points (-4.51%) closing at 9686 and the S&P 500 lost 5.03% closing at 1023. Both indexes have broken below their initial support levels of 9800 and 1050 respectively. The next support level for the DJIA is 9300 and 1000 for the S&P 500. For the year the DJIA is now down 7.11% and the S&P 500 is down 8.30%.

The MSCI (EAFE) World lost 2.51% and is now down 14.76% for the year. The Euro posted a weekly gain of 1.5% closing at $1.2560 up from last Friday's close of $1.2377. The better relative strength performance of the MSCI (EAFE) and the gain in the Euro was the result of a series of positive news stories from the Euro Zone.

Oil fell sharply for the week closing at $71.20 for an 8% to 9% drop from last week reflecting fears that global economic sluggishness will curtail demand. Gold also fell dramatically dropping slightly below the psychologically important $1200 per ounce before closing on Friday at $1207.70. This 3.8% drop illustrates what I refer to as the "schizophrenic" nature of investor sentiment about the yellow metal recently. One week gold is a safe haven, the next a speculative investment, and so the story goes. With better news coming from Europe and the stabilizing of the Euro, gold lost much of its appeal to European investors as a safe haven and demand fell--for now. Gold remains a strong technical asset and above its long-term support of around $1000 per ounce. Base metals fell again following the less optimistic economic news particularly from China.

Prices of US treasuries gained and pushed the 10-year rate down below 3% closing Friday at 2.9770%. It goes without saying that bond investors see little upside to the US economy in the near term and do not expect the Federal Reserve to raise rates anytime soon. Corporate bonds continued to show strength and most bond categories gained in value during the week.

LITTLE GOOD NEWS ON THE ECONOMIC FRONT

Last week I addressed the many negative data points coming out about the markets including low home sales, European debt concerns, and a Fed report that indicated that the economy was slowing.

On Friday the final blow came in the news of a very lackluster jobs report showing the first overall monthly loss this year. While most of the losses were attributed to the elimination of temporary census jobs, the real damage came from an increase of just 83,000 private-sector jobs. Overall the unemployment rate fell from 9.7% to 9.5% as another 652,000 Americans quit their active job searching. For May and June the number of people no longer looking is greater than 1 million. The concern now is what happens when these discouraged workers attempt to reenter the job force when job creation does begin. Additionally the average number of hours worked and wages also fell.

One bright spot is the expectation that inflation is not a problem now or in the foreseeable future. Consensus is that the Fed will not raise interest rates in the near future making investments in bonds at this point still attractive.

I remain concerned about the impact of large state government deficits. California, New York, New Jersey, Michigan and Illinois are all locked in political combat as fiscal policies are debated. What is certain is that each of these states is broke and only the infusion of federal dollars will keep these states from major financial reforms. These reforms most certainly would require significant spending cuts which in turn would be another drag on the overall economy.

NEWS FROM EUROPE IMPROVED

A series of stories coming from Europe have settled those markets for now and helped the Euro gain against the US dollar.

Most significantly, Spain's debt issuance went well. The country had no problems raising €7.5 billion ($9.4 million) of three-year notes indicating that the private sector was still prepared to lend to Spain. Also the Greek finance minister reported that his country was ahead of pace to dramatically cut its debt this year, and the French finance minister said that both French and European banks are in good shape based upon recent stress tests.

European Central Bank President Trichet spoke out over the weekend saying that the European governments were on track with fiscal policies aimed at limiting deficits and that growth would return once budgets were under control. This tended to hurt markets more than it helped as all major European indexes were down on Monday, July 5th, by some 0.3% to 0.5%.

Looking Ahead

My generally cautious outlook on markets remains in place and I believe that it is better to take a more conservative position and give up opportunity rather than risking the loss of capital at this time.

There may be rallies along the way given the selling pressure the markets have been under recently; and if headlines are any indication, the contrarian view would be to buy now. I prefer to wait until the market signals a sustained trend. Additionally, I believe there remain very substantive economic issues such as the impact of all the legislation coming out of Washington that must be worked through and that will take time. Additionally, the housing and employment data must get better. A jobless recovery will not sustain the markets, nor will falling housing prices continually pushed down by the vast number of foreclosures and short sales. However, by continually scanning all the market sectors using relative strength analysis, I will be able to keep you apprised of where positive trends are emerging.

The New York Stock Exchange Bullish Percent (NYSEBP) closed on Friday at 38.60% meaning that only about one in three stocks is in a point and figure buy status. This was a drop from last Friday's close of 48.62%. Anything below 30% is considered oversold and the markets are clearly in a negative trend. All short and intermediate-term indicators that I follow are all negative and all broad market indicators were down as well. The only consistent gains were found in the bond markets as corporates and treasuries continued to do well.

A key report due out on Tuesday is the Institutional Supply Management's (ISM) non-manufacturing job index. This index focuses on the substantial service sector employment area. The index stands at 55.4 and anything greater than 50 will show increasing growth in the service sector; however, the rate of growth slows as the number gets closer to 50. Below 50 indicates negative job growth in this all important sector.

While every sector was down last week, several unfavored sectors have shown better relative strength than others: Utilities and Telecom. These sectors may simply be benefiting from defensive rotation, but outperform they did. Investors may also be turning to these sectors to take advantage of the dividends typically paid by utilities and telecom companies. International markets also outperformed, but one week does not make a trend.

I continue to hold my opinion that while treasuries are very strong, they are very expensive at this point in time and new positions should be entered into thoughtfully. Corporate intermediate-term bonds remain favored.

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. Forward email This email was sent to paul@ntrustwm.com by paul@ntrustwm.com. Update Profile/Email Address | Instant removal with SafeUnsubscribe™ | Privacy Policy. Email Marketing by NTrust Wealth Management | 780 Lynnhaven Parkway | Suite 190 | Virginia Beach | VA | 23452 Send a test version of your email to yourself, and to others including a personal message. Up to 5 addresses may be entered separated by a comma ",". Email Address(es): paul@ntrustwm.com (Separate multiple addresses with a comma ",") Personal Note: Send both HTML & Text versions View HTML Version View Text Version View Printable Version