After four or five weeks of generally flat performance, US stocks posted their strongest gains yet in 2012 on encouraging economic reports regarding jobs, retail, and manufacturing. Only a somewhat negative report on consumer confidence on Friday took some steam out of the markets this week.

For the week, the Dow Jones Industrial Average (DJIA) gained 311 points (2.40%), the S&P 500 gained 38 points (2.43%), and the tech-heavy NASDAQ added 13 points (2.24%). The Russell 2000 slightly lagged the other key indexes gaining 1.61% for the week. For the year the DJIA is up 8.31%, the S&P 500 is up 11.65%, the Russell 2000 is up 12.05%, and the NASDAQ is up an impressive 17.58%.

Financials, Industrials, Real Estate, and Information Technology all outperformed the S&P 500 this past week with Financials leading all sectors with a 5% gain. Banks have been especially strong following the Federal Reserve's release of findings from rigorous stress tests designed to identify potential weaknesses among the major banks. Most banks did well and this has boosted the confidence of investors in this beaten down economic sector. The more defensive sectors like Telecom and Utilities have struggled so far in 2012 as investors have moved into the more cyclical economic sectors like Financials, Materials, and Industrials. For the year Information Technology, Financials, and Consumer Discretionary are the best performing sectors while Utilities, Consumer Staples, and Telecom are the worst. However, only the Utilities sector is down slightly at this point in 2012.

International stock indexes posted good, but more modest returns for the week with the European-heavy MSCI EAFE index gaining 0.85%. The Americas and Developed Markets were the best performing broad sectors within the International category while Emerging Markets and Asia/Pacific lagged. Germany, the Netherlands, and Sweden were the best performing countries of those I follow last week while Egypt, Malaysia, and India were the worst. For the year Emerging Markets is the best performing of the broad International sectors with Asia/Pacific, Developed Markets, and the Americas sectors closely bunched together and posting nice gains. Spain and Indonesia are lagging most International country performances with low single-digit gains.

The Dow Jones UBS Commodity index gained 0.57% ending a two-week slide, however, gold continued its fall with another 3.25% drop and WTI oil fell a slight 0.32%. Natural gas again posted strong gains to lead most commodity sectors along with gains in Sugar, Grains, and Agriculture. Cocoa and Precious Metals led among commodity sectors that were down for the week. Gold prices failed to rally on a weaker US dollar after the Wall Street Journal reported that the Indian Finance Minister proposed a doubling of import tariffs on gold for that country. India is the largest buyer of gold in the world and any reduction of demand there would be expected to hurt gold prices in general. Although oil prices ended the week basically flat, oil sold off Thursday after a news story said the US and Great Britain had agreed to a release of oil from the Strategic Petroleum Reserve to help off-set rising gasoline prices. This report turned out to be incorrect and oil prices rebounded on Friday to close at $107.06 per barrel.

The US dollar reversed course last week and posted its first negative return of the past three weeks. The US dollar fell even as interest rates on longer-maturity US Treasuries surged and the US economic outlook continues to improve. For the year, the US dollar is flat (the US dollar index is down 0.49%) against most major currencies. The one exception is the Japanese Yen which is up 8.32% against the US dollar. I have said before that I rarely trade in currencies, but I certainly pay attention to the general strength/weakness of the US dollar because of the important ramifications it has on stock and bond valuations.

Bond markets saw sizeable sell-offs of US Treasuries last week as the 10-year and 30-year notes saw their yields reach levels not seen since the end of October 2011. The US 10-year closed Friday at 2.294% and the US 30-year closed at 3.407%. The Barclays Aggregate US Bond index fell 0.73% last week to post the worst one-week return in over a year. I believe the move away from bonds can be attributed to the overall outlook for the US economy, reduced expectations that the Federal Reserve will rollout another round of quantitative easing, and increasing investor appetite for risk. The interest rate on the German 10-year Bund also rose sharply. Not surprisingly, long-duration US Treasuries and Corporates were the worst performing bond sectors last week and are also the worst performing for the year. Preferreds, floating-rates, and short-duration bonds were the best performing bond sectors last week. Overall, the Barclays Aggregate US Bond index is down 0.04% for the year.

SOME GENERAL THOUGHTS

I would like to begin this section of my Weekly Update saying how nice it is to be talking about something other than Europe. I do not apologize for the time I have spent addressing the issues in Europe because I believe their challenges do and will impact us here in the US both in immediate economic terms but also as a preview of what could happen here in the US if the federal government continues to spend far outside its means. But for now I happily discuss some other topics.

I spent this past Friday attending a seminar hosted by First Trust Advisors in Chicago. The speakers offered a variety of thoughts about the US and global economy and I would like to share some of their views. Before I begin let me say that I am not endorsing any specific opinion and forward-looking statements are subject to change at any time:

Overall thesis: the US economy is the most resilient in the world. US workers and corporations go about each day trying to be better and strive for economic prosperity. This effort translates into long-term growth that can overcome the headwinds found by excessive government spending, above average unemployment, and challenges from abroad.

Inflation: is present but not of the magnitude to cause immediate concern. The Federal Reserve will be forced to raise interest rates next year, but this is a good thing because it indicates a strengthening economy here at home. Fears that the increase in the money supply generated by the Fed's quantitative easing programs would lead to high inflation has not materialized because banks have taken much of the money created by the Fed and put it right back on deposit with the Fed. The overall circulation of money is not growing at the same rate as money creation keeping inflation in check for now.

Volatility: the strong start to the markets in 2012 has helped reduce volatility by driving many of the short-sellers (those who borrow stock, sell that stock in anticipation of a decline, and purchase it back at a later date thereby profiting on the decline) out of the markets. Their absence has helped to limit many of the big swings seen during the last half of 2011.

Europe: is not a banking problem but a government problem. Governments throughout Europe have been fostering an unsustainable "lifestyle" and we are now witnessing the end of the European welfare state. It will take years to play out, but the pendulum has begun to swing back towards less government spending. Governments will have no choice but to curb spending because the capital markets simply will not continue to lend money to profligate countries as they have done over the past 50 years.

Technology: the pace of technological innovation will continue to grow at an ever-increasing pace. New inventions result in even more inventions. The US is the world's leader in technological research and innovation. Not surprising then, the US also leads the world in highly skilled manufacturing capabilities and our workers are the most productive anywhere. This global leadership will continue to grow over the decades to come.

Demographics: pay attention to this important factor. The work forces of Japan, China, Korea, and Western Europe will be noticeably smaller by 2050 than they were at the start of this century. India and the US by contrast will grow substantially.

LOOKING AHEAD

Following the strong performance of US equity markets this past week, it will be interesting to see if markets will maintain that momentum. Economic data indicates that the US economy is stronger than expected (or it is less bad than expected), and may hold current gains. However, I believe that investors must carefully monitor their investments for any signs of weakness. Thus the technical indicators I follow from Dorsey Wright & Associates (DWA) help to identify early trends or confirm existing ones.

The relative strength analysis from DWA ranks five major asset categories from strongest to weakest. As of the date of this Update US stocks is the strongest category followed by Commodities, Bonds, International stocks, and Currencies. The International stocks category advanced out of the bottom position early last week and moved to fourth. The International stocks category has also shown the most improvement of any category in 2012. US stocks retain a very sizeable lead over the other categories with the bottom four clustered closely together.

Within the US stock category, DWA analysis ranks mid-capitalization stocks above large and small capitalization stocks. Growth stocks are favored over value stocks, and equal-weighted indexes are favored over capitalization-weighted indexes by DWA. I believe that it is important to pay attention to the major economic sectors when investing. DWA currently ranks the sectors on a relative strength basis as follows (starting with the strongest): Consumer Discretionary, Information Technology, Financials, Real Estate, Energy, Health, Materials, Consumer Staples, Industrials, Utilities, and Telecom. Investors seeking higher dividend income generally own the Utilities and Telecom sectors and these sectors are currently providing that income.

Within the Commodity asset category Energy and Precious Metals are the favored sectors. The current weakness of gold and silver may cause a change in this current ranking; however, it is too early to tell. Treasuries and International Inflation Protection Notes are the favored

sectors within the bond category; however, I believe the recent rise in interest rates is likely to challenge the relative strength leadership of Treasuries going forward. In terms of performance, preferreds, high-yield, and floating-rate bonds have been leading many other bond sectors as investors appear willing to take on more risk. Rising interest rates must be watched carefully because bond values will fall correspondingly. The newly promoted International stock asset category places the Developed Market sector on top with emphasis on the US. Outside of the US, the Emerging Market sector has shown the best performance in 2012. Finally, within the Currency category, DWA places the Australian dollar, the Brazilian Real, and the South African Rand as the top relative strength currencies.

Housing will be the focus of many economic reports coming from the Federal government this week. February Housing Starts will be released Tuesday morning. Consensus is looking for 700,000 new starts just slightly better than the 699,000 of the previous month. February Existing Home Sales will be released on Wednesday morning with consensus anticipating an increase of the annual sales rate from January's 4.57 million to 4.61 million. New Home Sales for February will be released on Friday morning. Consensus is expecting the annual rate to increase from January's level of 321,000 to an annualized rate of 325,000. Initial Jobless Claims will be published Thursday morning as it is every week. The consensus is anticipating a slight increase from 351,000 new claims so 352,000. Each of these reports is important to investors because they will confirm or challenge the assumptions by investors that the US economy is gaining strength.

The NYCE US Dollar Index is a measure that calculates the value of the US dollar through a basket of six currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss franc. The Euro is the predominant currency making up about 57% of the basket.

Currencies and futures generallyare volatile and are not suitable for all investors. Investment in foreign exchange related products is subject to many factors that contribute to or increase volatility, such as national debt levels and trade deficits, changes in domestic and foreign interest rates, and investors' expectations concerning interest rates, currency exchange rates and global or regional political, economic or financial events and situations.

Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, including international economic, political and regulatory developments.

Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation. The main risks of international investing are currency fluctuations, differences in accounting methods, foreign taxation, economic, political or financial instability, and lack of timely or reliable information or unfavorable political or legal developments.

The Dow Jones UBS Commodities Index is composed of futures contracts on physical commodities. This index aims to provide a broadly diversified representation of commodity markets as an asset class. The index represents 19 commodities which are weighted to account for economic significance and market liquidity. This index cannot be traded directly. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future.

TIPS are U.S. government securities designed to protect investors and the future value of their fixed-income investments from the adverse effects of inflation. Using the Consumer Price Index (CPI) as a guide, the value of the bond's principal is adjusted upward to keep pace with inflation. Increase in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable.

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.

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.

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, this is a market capitalization weighted index, meaning the largest companies in the S&P 500 have a greater weighting than smaller companies. The S&P 500 Equal Weighted Index is determined by giving each of the 500 stocks in the index the same weighting in the index. 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. The Russell 2000 Index is comprised of the 2000 smallest companies within the Russell 3000 Index, which is made up of the 3000 biggest companies in the US.

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

The past week saw modest losses in US and International stocks, bonds, and commodities. The news from Greece continues to be the focus of nearly all investors, and while it appears that the Greece deal is finally done, the price paid by Greeks to secure the bailout funds may prove costly in the future. Other headlines during the past week included another positive jobs report here at home, China announcing that it had the largest monthly trade deficit since 2000, and that the US trade deficit reached its highest level in over three years with exports to China and Europe falling significantly.

For the week, the Dow Jones Industrial Average (DJIA) fell 55 points (-0.43%), the S&P 500 gave back just over a point (-0.09%), and the tech-heavy NASDAQ fell 12 points (-0.41). As has been the case recently the Russell 2000 index fell significantly more than the other major US indexes losing 1.82% for the week. The losses in the Russell 2000 were, however, about half of last week's losses. After ten weeks of trading in 2012 the DJIA is up 5.77%, the S&P 500 is up 09.01%, the Russell 2000 is up 10.27%, and the NASDAQ is up 14.71%.

Economic sector performance was led by the Telecom sector with a gain of just under 1.5% followed by the Consumer Discretionary and Utility

sectors. Only the Materials and Energy sectors failed to outperform the DJIA for the week. For the year Information Technology, Consumer Discretionary, Financials, Materials, and Industrials have all posted double-digit gains exceeding the DJIA handily. The Utilities sector remains the only negatively performing sector for the year down just over 2%.

International stock indexes, like US indexes, posted negative returns for the week with the European-heavy MSCI EAFE index losing another 1.11% following last week's loss of 0.78%. I believe that European investors are not convinced that Greece or the EU is out of harm's way with the successful (from Greece's and the EU's perspective) bond swap with private bondholders. Investors are also looking at shrinking European economies. In a story reported by the Wall Street Journal late last week, the European Central Bank (ECB) announced it was reducing the 2012 growth target for the EU from an already anemic 0.3% growth forecast to a "slight contraction." Even with this downward revision, the ECB held interest rates steady at 1% last week and did not suggest that it was likely to lower rates anytime soon. Within international sectors, the Americas Region was the best performer losing just under 0.1% for the week, and remains the best performing region in March. The emerging markets sector lost nearly 2% but remains the strongest sector for the year gaining over 16%. The MSCI EAFE index is up 9.32% for the year.

The Dow Jones UBS Commodity index fell for the second consecutive week losing 1.55% notching the worst one-week performance for this broad basket index in 2012. Gold (+0.10%), WTI oil (+0.66%), and Brent oil (1.88%) were notable exceptions. Gold has gained 9.24% for the year and some investors consider it a possible hedge against currency depreciation. Gold traders tend to focus on global economic strength and central bank actions/reactions to that economic strength or weakness. I believe gold traders would, for example, respond very favorably if the US Federal Reserve announced another round of quantitative easing (QE III) to boost the US economy. This action could push more US dollars into circulation, holding interest rates down, weaken the US dollar, and increase the specter of future inflation-possibly the ideal soup for higher gold prices. Oil traders have recently been using the jobs report as a barometer of the strength of the US economy. As the jobs situation in the US has improved oil prices have risen with the expectations of higher demand. The ever-present tension between the West and Iran has also added upward pressure on oil prices. Natural gas was again the best performing commodity sector and remains extraordinarily volatile. Coffee, sugar, and aluminum were among the worst performing commodity sectors. Coffee prices have dropped nearly 20% this year; I hope to see that savings passed on to those of us who love our java in the morning.

The US dollar continued to strengthen against most major currencies last week. The Euro fell another 0.5% to close Friday at $1.312 as the Greece debt crisis moves to the next chapter. The US Dollar Index reported by the Wall Street Journal and represents a collection of foreign currencies has risen (representing strength for the US dollar) for the month and has shown a positive trend for the US dollar in the past several weeks making up for a poor start early in the year. Ramifications of this trend are important especially in commodity prices and international trade.

There has been minimal movement in the bond market this year and the past week was no exception. The Barclays Aggregate US Bond index fell 0.24% last week and is up just 0.70% for the year. The US Treasury 10-year yield moved back above 2% last week to close Friday at 2.030%. The US Treasury 30-year yield also increased to close at 3.179%. The increasing number of media reports on improving economic conditions in the US and Federal Reserve Chairman Bernanke's broad guidance that he did not expect to need another around of quantitative easing helped reduce the demand for bonds pushing interest rates slightly higher. Interest rate changes in Europe were mixed last week. France and Spain saw rates increase while Germany and Italy saw small declines. Spain's increase follows an announcement earlier by the prime minister that he would not hold Spanish debt to recently agreed to levels. For the week, there were modest gains in high yield municipals, low/short duration bonds, emerging market debt, and Treasury Inflation Protection Notes (TIPs) while extended duration Treasuries and intermediate municipals were the worst performing bond sectors. For the year, preferreds, international TIPs, and high yield have been the best performing sectors while extended duration Treasuries and corporates have been the worst.

IS EUROPE OUT OF TROUBLE?

A great sigh of relief will take place among the political class in Europe early Monday morning after the private debt exchange appears to have been successfully completed opening the door to the next full round of lending to Greece. The immediate crisis has been resolved, so no disorderly restructuring of Greek debt, and it appears that time has been bought for further efforts to deal with Portugal, Italy, Spain, and who knows who else. But, is Europe, and the EU really out of trouble?

I believe the answer is yes in the short-term and no in the longer-term.

For now, there is not the immediate threat of a meltdown in Europe because of an out-of-control market reaction to the Greek default. The ECB has played a critical role in calming markets down with their Long Term Refinancing Option (LTRO) which has injected critical liquidity into the

markets and pushed down dangerously high interest rates in Spain and Italy, and the EU's politicians have made some efforts towards a unified fiscal union by agreeing to modifications to existing treaty obligations. However, there remains great doubt about the future.

I have said repeatedly in my Updates that the real problem with Europe is that governmental and private sectors are simply too indebted with too little growth to deal with the problem without entire populations feeling the pain of adjusting to the new fiscal realities. Greece's economy shrank 7.5% in the 4th Quarter of 2011 and with the extreme austerity measures required to receive the second bailout, growth is highly unlikely to return for the foreseeable future. Adding to the underlying stress is an unemployment rate of 21% and climbing. I would not be surprised to see social unrest return to the streets. Spain is also confronting austerity issues and unemployment around 20%. The prime minister has openly defied an agreement he just signed with other EU leaders to hold down debt and declared that the decision to exceed the agreement with the EU was a sovereign choice. So much for fiscal unity and subordination of national budgets to the EU so desired by Germany. So I remain very skeptical that the EU will get through this fundamental economic adjustment over the next decade or so without some painful spells along the way.

The consequences to the outcomes in Greece, Spain, and Portugal are important to all of us. Not just in terms of how much we export to Europe, but in watching and learning how the EU handles their debt and spending challenges. Although our situation here in the US different (we have a printing press and the US dollar is still the global reserve currency), the future of domestic growth, unemployment rates, funding of future government obligations are all at stake.

LOOKING AHEAD

Greece is off the table for now so more attention will be directed towards the slowdown in China, rising oil prices, US domestic economic growth, and the tensions in the Middle East. Attention will also be directed now at Portugal, Italy, and Spain as investors decide what will happen there. As I noted last week, there has been a bit of a pause in the markets for now. After seeing strong monthly gains in January and February, March has been flat. This is not necessarily a bad thing because markets historically do not go straight up, so pauses are to be expected. Additionally, the technical indicators that I follow are still positive, strongly so in some cases. Yet momentum has clearly slowed.

US stocks remain the strongest of the five major asset classes I follow on a relative strength basis. This has been the case since early January of this year. The technical leaders I follow and produced by Dorsey Wright & Associates (DWA) favor mid capitalization stocks, equal-weighted indexes, and growth stocks over value. This data also emphasizes most major economic sectors except for Financials and Telecom.

According to DWA, the four remaining major asset categories: Commodities, Bonds, Currencies, and International stocks are all fairly tightly clustered together but far behind US stocks on a relative strength basis. Within the Commodity asset category, Precious Metals and Energy are the two emphasized sectors within this space. International bonds and Treasuries are the top two emphasized bond sectors. I am leery of the Treasury sector because of the extraordinary low level of interest rates, and I believe a great deal of risk lies within the bond category, especially extended duration bonds, today. The top three currencies on a relative strength basis are the Australian dollar, the Brazilian Real, and the Canadian dollar. Among the last asset category, International stocks, the US sector and Developed markets are currently favored, but I continue to like the emerging market sector as well.

The February Retail Sales Report will be released Tuesday morning. Consensus is for an increase from 0.4% in January to a 1.2% increase for February with auto sales being the major factor in the increase. The Federal Reserve will release the highlights of their Federal Open Market Committee meeting Tuesday afternoon. The Fed is expected to keep interest rates at between 0% and 0.25%, and this would be consistent with previous announcements and expressed intention to leave interest rates unchanged. Investors will be watching to see if there is any language regarding any type of additional monetary easing (QE III). Thursday is the weekly Initial Jobless Claims report (consensus is calling for a slight drop in weekly claims to 355,000) along with the February Producer Price Index and Friday is the February Consumer Price Index. Both of these inflation indicators are expected to increase of about 0.5%. Rising prices will be a concern as it eats away from the purchasing power of individuals.

The NYCE US Dollar Index is a measure that calculates the value of the US dollar through a basket of six currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss franc. The Euro is the predominant currency making up about 57% of the basket.

Currencies and futures generallyare volatile and are not suitable for all investors. Investment in foreign exchange related products is subject to many factors that contribute to or increase volatility, such as national debt levels and trade deficits, changes in domestic and foreign interest rates, and investors' expectations concerning interest rates, currency exchange rates and global or regional political, economic or financial events and situations.

Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, including international economic, political and regulatory developments.

Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation. The main risks of international investing are currency fluctuations, differences in accounting methods, foreign taxation, economic, political or financial instability, and lack of timely or reliable information or unfavorable political or legal developments.

The Dow Jones UBS Commodities Index is composed of futures contracts on physical commodities. This index aims to provide a broadly diversified representation of commodity markets as an asset class. The index represents 19 commodities which are weighted to account for economic significance and market liquidity. This index cannot be traded directly. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future.

TIPS are U.S. government securities designed to protect investors and the future value of their fixed-income investments from the adverse effects of inflation. Using the Consumer Price Index (CPI) as a guide, the value of the bond's principal is adjusted upward to keep pace with inflation. Increase in real interest rates can cause the price of inflation-protected debt securities to decrease. Interest payments on inflation-protected debt securities can be unpredictable.

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.

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.

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, this is a market capitalization weighted index, meaning the largest companies in the S&P 500 have a greater weighting than smaller companies. The S&P 500 Equal Weighted Index is determined by giving each of the 500 stocks in the index the same weighting in the index. 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. The Russell 2000 Index is comprised of the 2000 smallest companies within the Russell 3000 Index, which is made up of the 3000 biggest companies in the US.

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

In a week which saw the Dow Jones Industrial Average (DJIA) close above 13,000 for the first time since May 2008, and the NASDAQ index reach 3000 for the first time in over 12 years, the markets finished the week flat. There was plenty of news for investors to digest: gold falling nearly $72 (-4%) an ounce on Wednesday, rumors of a pipeline fire in Saudi Arabia, generally improving economic data at home, and the successful debt sale by the European Central Bank (ECB); however, investors were unfazed and unmoved.

For the week, the DJIA fell just 5 points (-0.04%), the S&P 500 added 4 points (0.28%), and the NASDAQ led all US indexes with a 0.42% gain. The Russell 2000 index that includes more middle and small capitalization stocks fell the sharpest losing nearly 3% for the week. Moves in the Russell 2000 often capture investor sentiment towards riskier stocks because of the exposure to smaller companies, and last week signaled that some risk exposure was being trimmed. February 2012 finished out strong and the overall performance of stocks in the first two months of this year ranks among the best since 1987. For the year the DJIA is up 6.22%, the S&P 500 is up 8.91%, the Russell 2000 is up 8.30%, and the NASDAQ is up a strong 14.24%. As a point of comparison, the four major indexes were all up just about 6% at this same point last year.

Consumer Discretionary, Financials, and Information Technology were the best performing sectors last week easily bettering the DJIA, while Energy, Industrials, and Materials were the worst performers. For the year, Information Technology, Financials, Consumer Discretionary, Materials, and Industrials have all posted double-digit gains while only Utilities remains in negative territory down over 2%.

International stock indexes, like US indexes, posted mixed returns with the European-heavy MSCI EAFE index posting its worst weekly returns of 2012 dropping some 0.78%. Lingering concerns about the successful implementation of the private investor Greek bond swap has raised fears that the second Greek bailout may become stalled. Additionally, concerns arose about the ability of other European Union (EU) governments' ability to meet pledged debt and budget reduction goals this past week when Spain's Prime Minister announced that his country would not reach the goals set for 2012. I still believe that the EU will resolve all remaining issues and give Greece the approved €130 billion loan on schedule. Emerging markets was the best performing international sector for the week and remains firmly in the lead of any major stock index, domestic or international, so far in 2012.

Commodities fell broadly last week after gold and oil posted negative returns for the week. Gold prices dropped $68.10 (-3.83%) an ounce for the week, and WTI Oil fell $2.92 (-2.66%) a barrel to lead most other commodity sectors downward. The Dow Jones UBS Commodity Index (a broad-based commodity index) lost 1.11% last week, and is now up 4.98% for the year. Oil prices pulled back after reports of a possible pipeline malfunction in Saudi Arabia turned out to be false. The drop in gold followed comments by the US Federal Reserve Chairman Ben Bernanke on Wednesday that gave investors the impression that another round of quantitative easing would not be forthcoming. Each round of quantitative easing results in more easy money in circulation. Easy money depresses the value of the US dollar, which in turn leads to lower commodity prices abroad, increasing global demand, and thus prices here in the US. In the long run easy money hurts everyone in the US through higher prices, low interest rates, and negative real return on many investments. Natural gas was the best performing commodity sector and remains extraordinarily volatile. Grains and other agricultural sectors managed to be modestly positive last week along with some industrial metals.

The US dollar gained against all the major currencies last week. The Euro fell two-and-a-half cents (-1.93%) to close Friday at $1.319 marking the largest one-week drop by the Euro in 2012. Worries about Greece "closing the deal" with the EU bailout and Bernanke's comments here that he was unlikely to weaken the dollar further brought investors back to the US dollar. The Federal Reserve remains committed to low interest rates for the foreseeable future, but it looks for now that there will not be any more new money creation to achieve that goal. The strengthening of the US dollar was also partially responsible for the drop in precious metals and oil last week.

US bonds maintained last week. I say maintained because there has been very little movement in bond indexes so far in 2012. The Barclays Aggregate US Bond index added 0.21% matching the previous week's gain of 0.21%. For the year this widely watched index is up 0.94%. The US Treasury 10-year moved above 2% last week put closed Friday at 1.977%--the same rate as the previous Friday. The US Treasury 30-year gained slightly to close at 3.108%. Every major European 10-year sovereign interest rate fell again last week as the ECB issued another €529.5 billion in low interest loans under the Long Term Refinancing Operation (LTRO). As of close of market on Friday Italy and Spain had sub-5% 10-year yields and this has taken a great deal of pressure off EU governments for now. Emerging market debt, preferreds, and high quality corporate bonds were the best performing bond sectors for the week while short-duration international sovereigns, Treasury Inflation Protection notes, and high yield bonds were the worst. For the year, preferreds, international, and high yield remain the best performing sectors while everything US Treasury-related, especially long-duration, have been the worst.

ARE THE MARKETS LOSING STEAM?

Anytime a key stock index reaches a nice round number as we did this week when the DJIA reached 13,000, investors inevitably question whether the markets have become too extended and if a pullback is imminent. Fair questions especially in light of what has happened over the past decade or so. Before I give you my thoughts on these subjects I will begin by saying I have no idea if the market has reached its peak for 2012 or whether or not we have a ways yet to go. I cannot predict interest rates, or stock prices, any more than I can tell you with certainty who is going to control the White House in 2013. I am not afraid to admit this to you because I am being completely honest and I am also in great company...100% of every other financial advisor and economist in the country has no idea either. But, and this is important, I can certainly offer you insights to where the markets are and what trends I am seeing and this is what I will offer in this Update.

One of the key indicators I use to evaluate the markets is the New York Stock Exchange Bullish Percent (NYSEBP). I discussed this indicator last week and said that the current level of the NYSEBP (76.2%) suggests there is greater risk in the market today. Any reading over 70% signals higher risk. I have also said that the markets are overbought meaning that when looking at prices over the past ten weeks, investments are trading at the very upper end of their price distribution curve. All of this suggests that the likelihood of a pause, pullback, or correction has increased. Markets never go up or down in one constant direction, there are always runs counter to the longer trend imbedded in any bull or bear market. However, there is empirical statistical data to reinforce gut instinct, and I much prefer data to instinct.

Another data point that I am watching is the rate of increase in the NYSEBP. For the first five weeks of the year, the NYSEBP was improving by 5% to 8% each week as the NYSEBP rose from 53% (start of year) to the 76% it is today. Over the last four weeks this number has been dropping meaning that the rate of increase has begun to slow signaling that fewer and fewer stocks are showing first-time point and figure buy signals. This past week saw the first negative number of the year as the NYSEBP fell 0.8%. This suggests that the "easy" part of the move upwards is over for now. It does not mean that indexes cannot go higher as stocks continue their rally and demand remains fully in control of the markets. It is just a cautionary note and one I am watching.

Finally I evaluate how far overbought or oversold the markets become. The S&P 500 is currently overbought by 81.8%. This number is high, but not alarming so. Moving above 100% becomes worrisome and anything over 150% is clearly flashing danger for a pause or correction. Currently the most overbought sector is emerging market bonds which is overbought by 191% while the most oversold sectors are managed futures and long-duration treasuries. If you own either sector you understand that these sectors have not performed well in 2012.

In sharing this information I am not trying to make everyone an expert in some of the technical analysis I follow, but rather to help provide some insight into how I see the markets. There are tools that help judge risk levels and provide some indication of the likelihood of something happening in the markets. Today the likelihood of a pause, pullback, or correction (or simply losing steam) is greater than it has been in quite a while. I do not know if and when this will happen, but it suggests patience at this point in time.

LOOKING AHEAD

The amount of information flooding into the news cycle for investors is staggering. There must be a dozen important stories coming daily from Europe about the debt crisis, Iran and the problems in the Middle East, and how our own economic situation here is becoming increasingly positive. When all of this is blended into the soup du jour, coupled with the strong move by most stock markets in 2012, it is not surprising to see the markets take a pause as they have these past couple of weeks.

Going into the week the US stocks asset category is the strongest, on a relative strength basis, of the five major asset categories I follow. Within the US stock asset category, I continue to favor mid-capitalization growth stocks and equal-weighted indices (which tend to overweight mid-capitalization stocks). Every major economic sector is currently favored with Consumer Discretionary, Information Technology, and Real Estate the strongest on a relative basis.

Commodities remain the second-ranked asset category followed by Bonds, Currencies, and finally International stocks. Within commodities I continue to favor energy and precious metals. The recent weakness in energy and gold is not especially troublesome at this point but certainly must be followed. A surge in the US dollar would provide a headwind to rising commodity prices going forward.

Within the bond asset category, I like International bonds, a mix of high yield and quality corporate bonds, and inflation protection bonds. One of the unfortunate by-products of the Federal Reserve's low interest rate policy is that many conservative investors, especially those who rely on bonds for their income, are being forced into more risky bonds in search of yield/income. With greater risk comes the need for greater vigilance.

For international investors I like the emerging market sector with emphasis on the Asia/Pacific region. Turkey, India, and Brazil have all be exceptionally strong so far in 2012. The volatility within emerging markets raises risk for investors so be sensitive to this risk.

It is a relatively quiet week for major economic reports. The regular Initial Jobless Claims report will come out at the usual 8:30 AM Thursday time, but this is likely to be eclipsed by the Employment Situation report on Friday morning. Expectations are for the unemployment rate to remain steady at 8.3% with a slight drop in non-farm payroll job creation.

The NYCE US Dollar Index is a measure that calculates the value of the US dollar through a basket of six currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss franc. The Euro is the predominant currency making up about 57% of the basket.

Currencies and futures generallyare volatile and are not suitable for all investors. Investment in foreign exchange related products is subject to many factors that contribute to or increase volatility, such as national debt levels and trade deficits, changes in domestic and foreign interest rates, and investors' expectations concerning interest rates, currency exchange rates and global or regional political, economic or financial events and situations.

Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, including international economic, political and regulatory developments.

Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation. The main risks of international investing are currency fluctuations, differences in accounting methods, foreign taxation, economic, political or financial instability, and lack of timely or reliable information or unfavorable political or legal developments.

The Dow Jones UBS Commodities Index is composed of futures contracts on physical commodities. This index aims to provide a broadly diversified representation of commodity markets as an asset class. The index represents 19 commodities which are weighted to account for economic significance and market liquidity. This index cannot be traded directly. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future.

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.

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.

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, this is a market capitalization weighted index, meaning the largest companies in the S&P 500 have a greater weighting than smaller companies. The S&P 500 Equal Weighted Index is determined by giving each of the 500 stocks in the index the same weighting in the index. 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. The Russell 2000 Index is comprised of the 2000 smallest companies within the Russell 3000 Index, which is made up of the 3000 biggest companies in the US.

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

A chapter has closed and another opened in the two-year saga of Greece's economic crisis as European leaders agreed to provide the second round of financing for the debt-ridden country. Markets responded favorably to the

news from Europe especially the Euro, which reached a 3- month high against the US dollar this past week. The trend of modestly favorable economic data continued here in the US despite the dark clouds forming on the horizon in the form of sharply higher oil prices.

The Dow Jones Industrial Average (DJIA), the S&P 500, and the NASDAQ indexes were all higher while the Russell 2000 closed down slightly for the week. The DJIA gained 0.26%, the S&P 500 gained 0.33%, the NASDAQ added 0.41%, and the Russell 2000 lost 0.21%. Eight trading weeks into the year the DJIA is up 6.26%, the S&P 500 is up 8.60%, the NASDAQ is up 13.77%, and the Russell 2000 is up 11.61%.

The Energy and Information Technology sectors were the stand out sectors last week while Real Estate, Financials, Consumer Discretionary, and Telecom were the worst performers. For the year, Information Technology, Materials, Financials, Industrials, and Energy have all posted double-digit gains while only Utilities remains in negative territory down just over 2%.

International stocks continued their strong performance this year on relative positive news from the European Union (EU). The European-heavy MSCI EAFE index was up 1.64% for the week and is now up 11.42% for the year leading all major international indexes. Emerging markets have continued to be best performing sector in the international category with the Asia/Pacific region leading all other regions for the year.

Commodities were the best performing asset category for the week on the strength of rising oil prices. The Dow Jones UBS Commodity Index (a broad-based commodity index) gained 2.46% last week, and is now up 6.16% for the year. WTI Oil surged $6.38 (6.18%) per barrel to close Friday at $109.62. Gold added $52 (3.01%) an ounce to close the week at $1777.90. Some analysts attribute the sharp rise in oil prices over the past two weeks to the mounting geopolitical tensions between Iran and the West, and that is certainly the case. However, the US dollar has been weakening as well and is playing a major role in the rise of oil and commodity prices. When the US dollar weakens, commodities become cheaper globally pushing up demand and prices. The weakest sectors within this major asset category have been mostly agricultural-related commodities such as cotton, livestock, and coffee.

The biggest story in the currency area has been the weakening of the US dollar over the past couple of weeks. The Euro gained $0.03 (2.36%) to close Friday at $1.345 marking the largest one-week gain in 2012 and pushing the Euro to a nearly three-month high. Investors are feeling more comfortable returning to Europe as fears of a Greece-induced EU meltdown subside. Adding further pressure to the US dollar is the Federal Reserve's continuing weak US dollar policy in holding interest rates to near zero. I believe that the US dollar will not strengthen as long as the Federal Reserve continues to suppress interest rates. The one exception would be if Iran and anyone starts shooting at each other. In this scenario I would anticipate a flight to safety directly to the US dollar.

US bonds rallied last week as interest rates all fell. The US 10-year Treasury moved back below 2% to close Friday at 1.977%, and the US 30-year Treasury fell slightly more but remained just above 3% to close at 3.099%. The key European 10-year sovereign interest rates all fell sharply in response to the news that the EU was moving forward on its €130 billion ($175 billion) bailout for Greece. International bonds, long-duration US Treasuries, and high yield have been the best performing bond sectors for the week while municipal bonds of all types were the worst performing. For the year, preferreds, international, and high yield are the best performing sectors while long-duration US Treasuries and corporates have been the worst. Overall performance of the bond category has been the weakest of the five major asset categories (US stocks, International stocks, Bonds, Commodities, and Currencies) I follow with the Barclays Aggregate US Bond Index up just 0.73% for the year.

WHERE WE STAND WITH GREECE AND THE EU

As expected, the Europeans have managed to come to an agreement that will

allow the second bailout of Greece to occur. There is still the matter of private debt holders exchanging their bonds for a 53.5% haircut and lower interest rates that must still happen to complete the entire deal. The window for the debt exchange opened last Friday and will continue for the next several weeks. The deals may be done, but challenges remain which helps explain why the markets did okay rather than terrific last week.

As most of you know, I frequently cite the on-line English version of Der Spiegel, one of Germany's leading publications, as a source of in-depth coverage of this crisis. I particularly like the German perspective this publication brings. Der Spiegel did not disappoint when this past weekend I came across an interview with esteemed Harvard economist, Dr. Kenneth Rogoff, discussing his views of where Greece and the EU stand today. Let me summarize his key comments:

• It is going to be difficult to keep Greece in the EU due to its mountain of debt and uncompetitive economy. • Greece's economy may have not reached bottom yet, and for Greece to be competitive, the country must cut wages in half. • Greece should be given a sabbatical or holiday from the Euro while remaining a full member of the EU. • Additional countries will also likely need to leave the Euro currency for now. Dr. Rogoff did not specify which countries, but he did suggest it would be the periphery countries, in my opinion, implying Portugal, Spain, and Italy. • The Euro Zone must turn into a single political entity. A "United States of Europe" with a single Finance Minister, control of banking regulations, and with sole spending and taxing authority.

Agree or disagree with Dr. Rogoff's beliefs it does give some insight into the challenges the EU will have going forward. I personally believe that he is right; however, the political will to make this happen is simply not there. This will lead to more last minute negotiations and bailouts coupled with uncertainty-induced stress on the markets in the EU during the coming months and years.

Over the next few weeks and months we will see the major international groups like the G-20 (twenty largest developed and emerging market economic leaders), the International Monetary Fund (IMF), and the EU itself debate the funding and size of the European bailout fund. The G-20 and the IMF have told the EU that they must increase the size of the bailout fund and provide a greater percentage of the funding compared to the past two years. No decisions will be made over the next month or two, but the G-20 and IMF have made it very clear that the EU must take the lead on this issue.

On another important topic, the tensions with Iran, I have had little to say. It is simply too difficult and irresponsible to speculate on what is going to happen in that region of the world. It is my opinion, however, that if Israel or the US made a military strike against the Iranian nuclear complex, there would an immediate market sell-off, a surge in oil prices, and bond rates would fall further. How long this situation would last is completely unknown. If the Iranian nuclear program is severely disrupted or destroyed and the Iranian military kept in check, then I suspect that the world would cheer and markets would then rebound sharply. If, however, Iran's nuclear capability remained or the Iranians were able to launch effective counter-strikes, then the markets would remain under pressure. Only time will tell how this will play out.

Oil prices will continue to remain under pressure for the time being because of tensions with Iran and the weak US dollar. The important question is when we will begin to see the impact of high oil prices on the overall economy. For every dollar Americans spend on gasoline, that dollar is not available to spend in the rest of the economy. I believe that we will begin to see more and more stories on this topic, and of course there will be the government statistics to help analyze what is happening in the economy.

LOOKING AHEAD

The statistics I follow from Dorsey Wright & Associates (DWA) show the markets to be overbought but not terribly so in most cases. Emerging Market debt is currently the most overbought sector followed by high yield corporate bonds, asset allocation investments, and emerging markets. This does not mean that these sectors will correct today or tomorrow but it does suggest caution and awareness.

Additionally, those of you who have read my updates over the past couple of years know that I follow the bullish percent indicator. The bullish percent is a tally by DWA of any major index (I most closely follow the New York Stock Exchange Bullish Percent--NYSEBP) that shows the percentage of stocks that is exhibiting a "buy" signal on its point and figure chart. I do not expect everyone to go and read Tom Dorsey's book on all of this, so I will tell you that whenever a bullish percent generally gets above 70%, there is greater risk in the market. Think of it as a tight wire walker working five feet off the ground compared to 50 feet off the ground. Obviously the higher you are the greater the risk and this is what the bullish percent tells me. Today the reading for the NYSEBP is nearly 77%. This high level coupled with the overbought status, to me, of the markets means that there is simply more risk in the markets today than at the start of the year and investors should be very selective on the investments they make at this point. If you have specific questions about a particular sector or asset category's status, please give me a call.

Notably this past week, the major Asset Category-Commodities, moved back into second place behind US stocks on a relative strength basis. The previous number two, Currencies, has fallen to fourth place just behind Bonds. The International asset category remains in fifth place, but has shown the most improvement on a score basis so far in 2012. It still has a ways to go before it overtakes Currencies in the number four position. Among US stocks, mid-capitalization growth stocks remain favored from a relative strength standpoint along with equal-weighted indexes. All major economic sectors are favored with Information Technology and Real Estate posting the strongest technical scores while Consumer Discretionary and Information Technology are the strongest on a relative strength basis.

As noted, the emerging market sector has continued to perform well with emphasis on the Asia/Pacific region. Thailand and Malaysia are particularly strong countries from that region of the world. South Africa is also performing well at this time. The volatility within the emerging market space makes investing in these regions riskier than most and should only be considered by more risk-tolerant investors.

The two-week surge in oil prices has pushed commodities back into a strong position. I favor precious metals and energy within the commodity asset category. My long-term bias remains towards carbon fuels.

The bond market remains attractive and I am not changing any of my opinions for this asset category. I continue to like international bonds, inflation-protection bonds, and a mix of high-yield and high-quality bonds. I am also watching senior bank loan bonds and am considering these as part of my bond portfolio. I do believe that for most bond investors income is the number one issue and this continues to be harder and harder to achieve as interest rates remain low. Bond investing has become much more difficult in recent years and I suggest investors pay particular attention to this part of their portfolios.

The second revision of the 4th Quarter 2011 GDP report will be released on Wednesday morning and is probably the most significant report coming out next week. Consensus calls for the GDP rate to remain unchanged at 2.8%. The weekly Initial Jobless Claims report will come out on Thursday as always. This report has been trending favorably in 2012 and is expected to show an improving employment picture in the US. The ISM Manufacturing Index will also come out Thursday morning and is expected to show a slight improvement.

The NYCE US Dollar Index is a measure that calculates the value of the US dollar through a basket of six currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss franc. The Euro is the predominant currency making up about 57% of the basket.

Currencies and futures generallyare volatile and are not suitable for all investors. Investment in foreign exchange related products is subject to many factors that contribute to or increase volatility, such as national debt levels and trade deficits, changes in domestic and foreign interest rates, and investors' expectations concerning interest rates, currency exchange rates and global or regional political, economic or financial events and situations.

Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, including international economic, political and regulatory developments.

Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation. The main risks of international investing are currency fluctuations, differences in accounting methods, foreign taxation, economic, political or financial instability, and lack of timely or reliable information or unfavorable political or legal developments.

The Dow Jones UBS Commodities Index is composed of futures contracts on physical commodities. This index aims to provide a broadly diversified representation of commodity markets as an asset class. The index represents 19 commodities which are weighted to account for economic significance and market liquidity. This index cannot be traded directly. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future.

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.

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.

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, this is a market capitalization weighted index, meaning the largest companies in the S&P 500 have a greater weighting than smaller companies. The S&P 500 Equal Weighted Index is determined by giving each of the 500 stocks in the index the same weighting in the index. 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. The Russell 2000 Index is comprised of the 2000 smallest companies within the Russell 3000 Index, which is made up of the 3000 biggest companies in the US.

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

Greece once again dominated headlines this past week as fears surfaced that the "sure thing deal" was not as much of a sure thing as investors have believed these past weeks. Additionally, the downgrade of 34 Italian banks by Standard & Poor's Friday further shook investor confidence.

All major stock indexes posted their first weekly loss in 2012. The Dow Jones Industrial Average (DJIA) fell 61 points (-0.47%) while the S&P 500 lost just over two points (-0.17%). The frequently more volatile Russell 2000 index (greater weighting of smaller company stocks) lost 2.14% and was the worst performing major index of those I follow. The technology heavy NASDAQ index was the best performing major US stock index losing just 0.06% for the week. After six trading weeks thus far in 2012, the DJIA is up 4.78%, the S&P 500 is up 6.76%, the Russell 2000 is up 9.71%, and the NASDAQ is up a strong 11.47%.

The Information Technology sector was the best performing of the eleven major economic sectors followed by Energy, Consumer Staples, and Telecom. Materials, Real Estate, and Financials were the worst with Materials and Real Estate both losing more than 2% for the week. Information Technology, Materials, Financials, and Industrials have posted double-digit gains so far this year with all sectors, except Utilities, providing positive gains.

International stocks were mixed last week with Asia/Pacific stocks and Emerging Market stocks remaining slightly positive while most other regions and sectors of the world were negative. Worries about Greece and that country's ability to deliver on demanded austerity cuts caused the greatest concerns among investors as talks between all concerned parties appear to be going down to the bitter end. For the year, the European-heavy MSCI EAFE is up 7.96% after losing just 0.29% last week while the Emerging Market sector continues to lead all other sectors both domestically and abroad.

Commodities in general were slightly negative for the week. The Dow Jones UBS Commodity Index (a broad-based commodity index) declined by 0.45% last week, but remains positive by 2.99%% for the year. Gold lost $15.00 (-0.86%) an ounce to close the week at $1725.30. Reports indicate that gold investors may have been raising cash as fears mounted about Greece, and a rising US dollar also made gold more expensive abroad hurting demand. WTI Oil and Brent both climbed last week with WTI gaining $1.01 (1.03%) per barrel while European-dominated Brent gained 2.38% per barrel. Oil prices did retreat on Friday after the International Energy Agency reduced its 2012 daily global consumption forecast by 300,000 barrels. The Organization of Oil Producing Countries (OPEC) similarly reduced its forecast as well earlier in the week. Commodity prices were also depressed by news from China that Chinese imports of commodities were down in January for the first time in seven months.

Currency fluctuations remained subdued this past week. The Euro gained $0.003 (0.23%) to close Friday at $1.319 from the previous Friday close of $1.316. The Japanese Yen gained 0.95% against the dollar. The Euro did fall a full penny on Friday's trading on the negative drumbeat of news coming from Europe about Greece.

US bonds were relatively flat again last week with the Barclays Aggregate US Bond Index gaining 0.18% for the week and is now up just 0.67% for the year. While yields of both the US 10-year and 30-year Treasuries gained last week (bond prices falling), Treasury prices jumped on Friday as investors returned to the US for safety on European worries (are you noticing a theme this week?). Mortgage-backed bonds was the best performing bond sector last week followed by US long-duration US Treasuries and High Yield, while International treasuries was the worst. For the year preferreds, municipals, treasury inflation, and emerging market debt have been the best performing bond sectors while longer duration US Treasuries has been the worst.

THIS GREEK TRAGEDY HAS NO END

Scanning media outlets both here and abroad this week, I was struck by the observation that virtually every major financial headline has a reference to Greece. I also find some irony in that fact that the word tragedy is of Greek origin. Events are moving swiftly and some of what I discuss below may have changed by the time my Update is published.

Let me begin by putting the Greek debt crisis into real numbers. According to an article in Der Spiegel this week, Greek debt in 2008 totaled €263 billion. The European Central Bank (ECB) estimates that at the end of 2011 that debt had grown to €355 billion-a jump of nearly 26%. Economic output (GDP) over the same period fell 6.9% from €233 billion to €218 billion. If the ECB's numbers are correct, the current debt-to-GDP ratio in Greece stands at 163%. The €14.4 billion bond payment due on March 20th represents 6.6% of the total 2011 output of the Greek economy. Money the Greek's simply do not have. European Union (EU) leaders understand that the growth rate of Greek debt must be halted and is at the core of demands the EU, ECB, and International Monetary Fund (IMF) have sought. These three organizations are expected to make a final decision this week on whether or not Greece will receive the next round of bailout funds estimated to be €130 billion.

This past Thursday evening the Greeks and EU/ECB/IMF negotiators announced that the Greeks had accepted the terms demanded by the EU for further aid. This agreement includes severe austerity measures aimed at reducing the amount of outstanding debt to 120% of GDP by the year 2020. A second major component of achieving this reduction in debt is the 50% "voluntary" write-down of the €200 billion of debt currently held by the private sector. These discussions appear to be going well; however, there must be complete agreement no later than next Friday, February 17th, in order for all of the bond swaps to be completed by the March 20th deadline.

If the Greeks have agreed to the new austerity measures and the private sector debt restructuring talks appear to be a done deal, then why have the markets not reacted more positively? The answer is we have been here before and the Greeks have failed to deliver on their promises of spending cuts and debt reduction. This time, the EU/ECB/IMF group is demanding that the major Greek political parties all publically support the austerity measures and that the Greek parliament passes the austerity measures into law before the bailout money will be released.

Not surprisingly many Greeks are not happy about these most recent agreements and the major labor unions have called for a two-day general strike and three days of protests before the Greek parliament votes on the austerity package either late Sunday evening (February 12th) or Monday. The leadership of both major political parties in Greece have come out in favor of the austerity cuts and are urging their party members to vote for passage. At least one minor party has come out against the package and there are reports that some individual members of both parties have said they would also oppose the deal. Most experts doubt, however, that the bill will fail to pass and that Greece will receive their money just in time.

As I have commented before, all of this deal making and bailouts does not solve the true problem in Greece and that is the Greek economy is broke and there is no economic growth in the foreseeable future that will allow the Greeks to pay off their mountain of debt. The Greek economy will require a fundamental restructuring and that may take many, many years. In the meantime, the Greeks will continue to face deadlines and rioters in the streets as they find themselves repeatedly up against the wall to make bond payments with cash it does not have. It also remains to be seen whether the Germans and other Europeans have the patience to continually provide Greece money and whether the Greeks will have the patience to face a severe cut to their standard of living and fundamental changes to their economy. I have my doubts. Greek resentment has risen dramatically as evidenced by recent signs and editorial cartoons depicting references to Hitler's Third Reich, and Greek polls showing little support for the cuts. Some Germans, but not German Chancellor Merkel, are now talking openly about releasing Greek from the EU at some point and using this next loan as a way to buy time so an orderly breakup can occur.

I believe all of this uncertainty is what eats away at the markets and frightens investors. No one really knows if Greece can fix itself or if Greece will be in the EU six-months or a year from now. The EU leadership's insistence of keeping Greece in the EU stems more from a lawyer-like desire to reach an out-of-court settlement in which you know the terms of the deal versus taking your chances in front of a judge. The markets will certainly tell us how well the Europeans are doing on dealing with this crisis.

One other point-Portugal is next.

LOOKING AHEAD

The uncertainty surrounding events in Greece is likely to continue impacting markets both here and abroad. I believe that the markets are expecting a favorable resolution in Greece and the EU even as deadlines

draw near. The lukewarm reaction to last Thursday's announcement that an agreement was reached may have indicated that the agreement had already been priced into the markets, or investors may simply be waiting for the funds to actually be transferred to Greece before anyone will begin to breathe a sigh of relief.

As investors, we must keep a close watch on Greece, however, the signs that markets have been strengthening continue. The economy shows signs that growth, albeit weak, is here to stay. The political uncertainty surrounding the upcoming elections is still months away and the Federal Reserve remains exceedingly accommodative.

The markets are overbought but not to the point that new positions cannot be taken, however, that window may be closing. Overall, the market is currently 114% overbought in relation to the past ten weeks and I consider a reading of 150% as a clear red flag. US Stocks have continued to be the strongest of the five major asset categories I follow followed by Foreign Currencies, Commodities, Bonds, and International stocks. International stocks have made the greatest improvement recently particularly the emerging market sector.

Among US stocks, mid-capitalization growth stocks remain favored from a relative strength standpoint along with equal-weighted indexes. All major economic sectors are favored with Information Technology and Real Estate posting the strongest technical scores while Consumer Discretionary and Real Estate are the strongest on a relative strength basis.

As noted, the emerging market sector continues to perform well with emphasis on the Asia/Pacific region. Thailand, Indonesia, and Malaysia are particularly strong countries from that region of the world. South African and Peru are also performing very well at this time. The volatility within the emerging market space makes investing in these regions riskier than most and should only be considered by more risk-tolerant investors.

Other than gold and precious metals, the commodity space is showing lackluster returns so far in 2012. Global demand appears to be weakening and a strengthening US dollar is providing headwinds for commodities. Individual commodities may pop based upon an important headline or event; however, across the board I see broad commodity investments as a place to trim portfolios right now. My long-term bias remains towards carbon fuels once demand picks back up or the US dollar weakens.

The bond market remains attractive and I am not changing any of my positions for this asset category. I continue to like international bonds, inflation-protection bonds, and a mix of high-yield and high-quality bonds. I am also watching senior bank loan bonds and am considering these as part of my bond portfolio recommendation. I do believe that for most bond investors income is the number one issue and this continues to be harder and harder to achieve as interest rates remain low. Bond investing has become much more difficult in recent years and I suggest investors pay particular attention to this part of their portfolios.

There are a slew of important economic reports being released this week. On Tuesday morning the Retail Sales report for January is expected to show a nice bounce on the strength of auto sales. The January Industrial Production report will be released on Wednesday morning. It is expected that industrial production will increase over December's report. Thursday will have a group of reports coming out. January Housing starts are expected to increase slightly over December's numbers while Initial Jobless Claims is anticipated to be about the same as last week, and the Producer Price Index will give investors some indication of how much inflation is showing up at the manufacturing level. Consensus expects a jump. The week finishes on Friday with the Consumer Price Index (CPI). Like the Producer Price Index (PPI), this indicator is of inflation only at the retail level. Like the PPI, the CPI is expected to jump. Collectively these reports will help investors gauge the strength of the US economy.

The news from Europe will be important next week, but so will the reports about the strength of the US economy. Stay patient and do not let your emotions get the better of you in either up or down markets.

Please note that I will be traveling on business next weekend and will not be publishing a Weekly Update for the week of February 19th.

The NYCE US Dollar Index is a measure that calculates the value of the US dollar through a basket of six currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss franc. The Euro is the predominant currency making up about 57% of the basket.

Currencies and futures generallyare volatile and are not suitable for all investors. Investment in foreign exchange related products is subject to many factors that contribute to or increase volatility, such as national debt levels and trade deficits, changes in domestic and foreign interest rates, and investors' expectations concerning interest rates, currency exchange rates and global or regional political, economic or fi nancial events and situations.

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.

Emerging market investments involve higher risks than investments from developed countries and also involve increased risks due to differences in accounting methods, foreign taxation, political instability, and currency fluctuation. The main risks of international investing are currency fluctuations, differences in accounting methods, foreign taxation, economic, political or financial instability, and lack of timely or reliable information or unfavorable political or legal developments.

The Dow Jones UBS Commodities Index is composed of futures contracts on physical commodities. This index aims to provide a broadly diversified representation of commodity markets as an asset class. The index represents 19 commodities which are weighted to account for economic significance and market liquidity. This index cannot be traded directly. The commodities industries can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions. Past performance is no guarantee of future results. These investments may not be suitable for all investors, and there is no guarantee that any investment will be able to sell for a profit in the future.

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, this is a market capitalization weighted index, meaning the largest companies in the S&P 500 have a greater weighting than smaller companies. The S&P 500 Equal Weighted Index is determined by giving each of the 500 stocks in the index the same weighting in the index. 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. The Russell 2000 Index is comprised of the 2000 smallest companies within the Russell 3000 Index, which is made up of the 3000 biggest companies in the US.

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