Markets reacted negatively to the release of the minutes from the Federal Reserve's Open Market Committee (FOMC) meeting this past week after the FOMC indicated that it was unlikely to offer another round of quantitative easing (QEIII) in the near term. Also making investors nervous was the weak auction for Spanish debt and the sharp drop in the creation of new jobs announced (121,000 new jobs vs. 201,000 expected) Friday morning by the Department of Labor's Bureau of Labor Statistics. These major news events permeated most markets to some degree last week.

For the week, the Dow Jones Industrial Average (DJIA) lost 152 points (-1.15%), the S&P 500 fell 10 points (-0.74%), and the mid- and small-

capitalization heavy Russell 2000 gave back 1.46% in the holiday-shortened trading week. The NASDAQ outperformed the other major US indexes by losing just 0.36%. The DJIA matched its worst one-week performance in 2012 of just two weeks ago, and the S&P 500's drop was its worst weekly pullback of the year. The drop in the more volatile Russell 2000 was the third worse out of four weekly losses so far in 2012 for this broad index, while the NASDAQ posted only it's second down week this year. For the year the DJIA is up 6.9%, the S&P 500 is up 11.2%, the Russell 2000 has gained 10.4%, and the NASDAQ continues to lead all major indexes with a gain of 18.2%.

Every major US economic sector saw declines last week. Consumer Discretionary bettered all other sectors with a slightly negative return for the week followed by Consumer Staples, Health Care, Information Technology, and Utilities. Energy, Financials, Materials, and Industrials were the bottom four sectors and all returned less that the DJIA. For the year, Information Technology, Financials, Consumer Discretionary are the top three performing sectors and are all ahead of the S&P 500. Utilities, Energy, and Telecom are the bottom three with Utilities the only sector with a negative return so far in 2012.

International stocks underperformed US stocks last week by a wide margin. The European-heavy (two-thirds Europe, one-third Japan) MSCI EAFE index was down 3.05% over renewed debt concerns in Europe. Spain has become especially worrisome following a particularly weak bond offering last week and a corresponding surge in interest rates for its sovereign debt. The yield on Spanish 10-year debt jumped nearly one-half percent to close last week at 5.757%. Italian debt jumped at nearly the same rate, and the French 10-year is now close to breaching the 3% yield hurdle.

The Dow Jones UBS Commodity index posted yet another weekly decline giving back just under 0.2%. This broad commodity index is now down four of the past five weeks and is up just 0.7% for the year. WTI Oil added $0.11 (0.1%) per barrel to close Friday at $103.31. Gold posted its third worst weekly loss for 2012 losing $41.80 (-2.50%) per ounce closing at $1630.10. I believe the price of gold has come to reflect investor fears over the amount of currency in circulation both in the US and abroad. When the news from the FOMC minutes was released last Tuesday saying that the Federal Reserve is likely to sit tight on a third round of quantitative easing for now, gold investors immediately sold because expectations of currency inflation were greatly diminished. My belief is that commodity prices are a proxy on two important issues: supply and demand, and currency valuations. Supply and demand is basic economics. The stronger an economy, the greater the demand, and if commodity production cannot keep up with demand, prices jump. The value of the US Dollar is also driven by supply and demand, but is heavily influenced by the monetary policies of the Federal Reserve, and because most commodity contracts are valued in the US Dollar, a cheaper US Dollar means commodity prices tend to rise and vice versa. There are many factors weighing on the price of commodities and thus commodity prices can be difficult to predict leading to greater volatility as data reaches the markets. I continue to believe, however, that commodities remain a possible hedge against rising inflation.

The Euro had its sharpest one-week pull back this past week on the weakness in the Spanish bond market losing almost three cents (-2.03%) to close Friday at $1.306. Correspondingly, the US Dollar Index, a basket of foreign currencies measured against the US dollar had its best one-week performance for the year gaining 1.36% for the week. The Euro is now up just 0.9% for the year reflecting the great uncertainty and direction of the markets at this time.

Bond markets rebounded nicely last week after QEIII was taken off the table for now. The Barclays US Aggregate Bond Index was up 0.49% for the week, and is up 0.82% for the year. As I noted last week, the bond market is still just drifting along and influenced by the many nuances of the Federal Reserve and its somewhat activist monetary policies. I will discuss some of the issues surrounding QEIII in the next section. The 10- and 30-year US Treasury interest rates both fell with the 10-year yield closing the week at 2.177% compared to the previous Friday's close of 2.214%. The US 30-year yield settled at 3.328% down from the previous week's close of 3.341%. For now, the US Treasury remains the go-to place for "safe haven" investors from around the world. Extended duration US Treasuries were the best performing bond sector for the week while international treasuries was the worst. For the year, preferreds, international inflation protected, and high yield are the best performing bond sectors while extended duration US Treasuries and corporate are the weakest.

TO QE OR NOT TO QE?

William Shakespeare sure had a way with words and here I am liberally quoting from the great English bard some 400 years later. However, unlike Hamlet, I am not contemplating suicide but rather looking at the impact of the Federal Reserve's decision to opt out of QEIII for now (based upon last Tuesday's release of the FOMC meeting minutes), and whether the poor jobs report this past Friday will raise the possibility of QEIII returning to the active policy mix.

Let me begin by saying that I personally believe the markets are overly obsessed with the concept of QEIII. I would like to see the Fed sit on the sidelines for now and let the US economy exist without constant tinkering from the Fed. But Mr. Bernanke's active chairmanship at the Fed forces investors to constantly evaluate his interventions, or possible interventions, in the markets. So whether or not I like it, here I am talking about QEIII. Central bank operations is not the stuff for exciting reading, but I ask that you to bear with me because this is important.

For those of you who may not be entirely familiar with QE let me quickly summarize for you. QE is the Federal Reserve's slightly indirect route to printing more money and putting it into circulation within the economy. The belief is that more money in circulation will help by providing more funds to the banks to lend, give asset prices a boost giving investors more confidence, and will keep interest rates down thus encouraging more borrowing. I would add one additional objective-keeping government borrowing costs low so the impact of borrowing trillions of dollars does not blow up spending budgets with excessive interest payments.

I refer to QE as QEIII today because the Fed has already under taken QEI and QEII, so their next effort will be QEIII. How the Fed puts money into the market varies between QE's but boils down to buying US Treasuries in the open market and getting cash into the economic system. QEI was straight bond buying-create money and buy bonds. QEII, also known as Operation Twist, targeted longer duration (>7 years) bonds for purchase. What makes QEII slightly different is that the Treasury used shorter duration bonds that were maturing as the source of cash to buy the longer duration bonds. The Fed has contended that QEII would have minimum inflationary pressure on the economy because the net supply of money would be unchanged. QEII is expected to conclude by the end of June which helps explain the recent preoccupation with QEIII.

Last week the Fed said it would not implement QEIII and hold steady on monetary policy for now because the economy is improving. The improvement is not as robust as the Fed would like, but it is improving. The Fed also said that it expected the unemployment rate to remain elevated for the time being even as the economy slowly improves. The Fed has been telegraphing this position for some time so I was a little surprised by the immediate and negative impact the release of the minutes had on stock markets Tuesday and Wednesday. The jobs report on Friday was also is in line with the Fed's earlier comments, but the larger than expected drop has caused observers to ask again if the Fed will now consider QEIII?

The constant tinkering by the Fed in the markets is one of the major factors why investing has become so difficult today. You just don't know how and by how much the Fed will enter into the financial markets. I am very skeptical that one poor jobs report will be enough to sway the Fed when it meets again April 24th and 25th. Therefore, I believe that investors will increasingly turn their attention to corporate earnings, inflation data, and economic data for market guidance. I believe the Fed will continue to wait on QEIII for the time being.

LOOKING AHEAD

Last week's economic data reinforced my belief that the US economy resembles a toddler riding a bike on training wheels-unsteady, uncertain, but upright and moving forward. Market data over this past weekend indicates that markets may open to the downside at the very start of the week, but there is much more going on then just a single jobs report that may influence markets for the week. I must remind everyone that the European debt crisis is like a volcano that is rumbling beneath the surface. Rising interest rates in Spain and Italy are especially troubling, but Europe has so much further to go before this region stops being a drag on the world economy. Here in the US, the 1st quarter earnings season is upon us and most stories I have read are raising concerns that corporate earnings will not be as robust as they have been.

For now, my views about the markets developed through the Dorsey Wright & Associates (DWA) relative strength analysis is unchanged. US stocks remains the strongest asset category followed by Commodities, Bonds, International stocks, and Currencies. US stocks retain a very sizable lead over the other categories with the others clustered closely together. Mid-capitalization stocks are favored, growth is favored over value, and equal-weighted indexes are favored over capitalization-weighted ones. On a relative strength basis, DWA puts Consumer Discretionary, Information Technology, and Financials as the three strongest economic sectors.

Key US economic data releases this coming week will be focused on inflation with the International Trade and Producer Price Index reports coming Thursday morning and the Consumer Price Index report on Friday morning. All three of these reports are expecting very modest improvements. Following last Friday's Employment Situation report, investors will be very interested in Thursday morning's Initial Jobless Claims report. Consensus is calling for a slight uptick from first time jobless claims of 357,000 last week to 359,000 this week.

Finally, last Friday was an exciting day here in Virginia Beach. As I am sure most of you have heard, a Navy F-18 Super Hornet jet crashed shortly after takeoff into an apartment complex. The pilots survived as did everyone on the ground. Each of us in our own way has much to be thankful for and I will be forever grateful that Esther survived without a scratch. Tough times lay ahead as the families try to recover their property losses.

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 ®, CRPC ® 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®,Member FINRA/SIPC, a Registered Investment Adviser.

US and global stock markets posted excellent returns for the first quarter of 2012 ending March 30th. The Dow Jones Industrial Average (DJIA) added 995 points (8.14%) since the beginning of the year, the S&P 500 added 12.0%, the mid, and smaller capitalization weighted Russell 2000 gained 12.1%, and the tech-heavy NASDAQ was up a strong 18.7%. European markets also posted solid gains with the European-heavy MSCI EAFE up 10.0%. Within the international sector, emerging markets led all international sectors with gains so far of 13.7%. Commodities and bonds have underperformed so far in 2012 as the global economic outlook remains uncertain and as bond holders trim holdings, especially long-duration bonds, and shifting into stocks.

For the week, the DJIA gained 131 points (1.00%), the S&P 500 added 11 points (0.81%), and the Russell 2000 was once again flat adding just 0.03% for the week. The NASDAQ continued its positive ways adding another 0.77% for the week. US markets shrugged off a discouraging report indicating that home prices had continued to fall taking encouragement by the slowing pace of decline. Additionally, other housing data suggested that the housing market may be finding a bottom, and a report on consumer spending released on Friday boosted markets because it showed consumers were spending at the highest rate in seven months.

Health Care, Real Estate, and Consumer Staples led the eleven major economic sectors I follow. Only Telecom and Energy were negative for the week. For the quarter, Information Technology, Financials, and Consumer Discretionary were the best performing sectors notching gains greater than 16%. Materials, Industrials, and Health Care also notched double-digit growth. Utilities, Energy and Telecom were the bottom three. Utilities remains, as it has for most of the year, the only sector with a negative return. When dividends are factored in, the Utilities sector is down less than 2% for the quarter.

International stocks were generally flat last week. The MSCI EAFE was down 0.21% while the Americas sector led all other international sectors gaining 0.52%. Emerging markets gave back 4% of its 2012 gain in March putting a negative tone to what has otherwise been an outstanding start to the year.

The Dow Jones UBS Commodity index posted a second consecutive weekly decline giving back another 1.50% for the week. This broad commodity index is now down three of the past four weeks. WTI Oil lost $3.67 (-3.43%) per barrel to close Friday at $103.2. For the quarter, WTI Oil gained 4.4% but remains well below the weekly close of $109.62 on February 24th. The price of oil has been strongly influenced by the tensions in the Middle East with Iran, the fluctuations in the US dollar, and the global economic outlook. Gold posted its second weekly gain adding another $9.50 (0.57%) per ounce closing at $1671.9. Gold investors are watching European leaders and their most recent agreement to increase the size of the European bailout fund (more commitment equals the need for more Euros), as well as the US Federal Reserve for any indications that the Fed will come forth with another round of quantitative easing. In short, the more governments print money, the more I believe investors will push the price of gold higher. Among the specific commodity sectors I follow, cotton, coffee, and tin were the best performing sectors last week while natural gas, energy, and oil were the worst last week. For the year, tin and gasoline are the best performing sectors with natural gas, energy, and livestock the worst.

The Euro continued to gain slightly against the US dollar adding less than a penny to close Friday at $1.333. The US Dollar Index, a basket of foreign currencies measured against the US dollar also fell slightly losing 0.43% for the week. The Euro is now up 3.01% for the year while the US dollar index is down 1.46%. I believe the general lack of direction in the currency markets reflects the lack of consensus among investors about the true direction of not only the US economy, but most other national economies as well.

Bond markets have been very stable during the first quarter and this past week was more of the same. The Barclays US Aggregate Bond Index was up 0.27% for the week, down 0.58% for the month, and is up 0.33% for the year. Drifting along would be a more apt description. The notable exception would be the extended duration US Treasury sector which has seen a sell-off so far in 2012. Interest rates on the 30-year have moved from 3.014% to 3.341%. A jump of about one-half of one percent in the yield may not sound like much, but represents a 15.7% increase in the yield and has driven the price of 30-year Treasuries downward. The US 10-year has seen an even larger percentage change in yield with an 18.3% uptick from 1.871% to Friday's close of 2.214%. It is also notable that 13% of the year's gain in the 10-year Treasury yield came in just one week reminding us that interest rates can move decisively at times. The gainers for the quarter have been preferreds, high-yield, and emerging market bonds.

SO WHAT ABOUT NEXT QUARTER?

Going into the second quarter of 2012, stocks have rallied, Europe remains a mess, the US economy looks like a toddler riding a bike with training wheels, bond and currency traders are an uncertain lot, China is slowing down, and the world remains a dangerous place. So what else is new?

I am drawn back to my January 22, 2012, Weekly Update where I discussed the "Certainty of Uncertainty." I said then "Today is no different from yesterday. Yesterday is no different from last year, and last year no different from last century," but that "the uncertainty is the same." My view remains in place. We are always dealing with challenging times and we must be diligent and focused on the opportunities and risk that we see today and into the near future within the context of our individual situations and risk tolerance.

As most of you know, I rarely make predictions. Predictions are an exercise of futility over the long run. No one pundit ever gets it right on a regular basis. There is no shame in that because it is simply impossible to predict the future. Barron's magazine published an article July 29, 1991, which simply stated, "The future course of prices or market returns is...unknowable, for it is subject to the arrival of new, unpredictable information." I think we all understand this on a most intuitive, fundamental basis, and acknowledging this fact is the main reason I use Dorsey Wright & Associates (DWA). DWA gives me the tools I need to help analyze what the markets are actually doing. So, no predictions about the rest of the year, but here are the things I am going to be looking at as we start the second quarter.

Interest Rates. Many ferocious battles take place, often out of sight, in the world of bond traders. Huge fortunes can be made or lost with the small, incremental changes in interest rates. Investors in Long-Term Capital Management in the late 1990's and MF Global more recently were victims of interest rate/bond interest rate bets gone wrong. But beyond this point, what do interest rates tell us?

Rising yields/falling bond values suggests:

There are more net bond sellers than buyers (more supply than demand) because investors-

-perceive better investments elsewhere (such as stocks)

-greater confidence in the economy (less fear, less need for safety)

-increasing fear of inflation (demand higher interest rates to offset higher prices of goods and services)

The converse is generally true when yields fall and bond values rise.

Therefore, in a very general sense, rising interest rates can signal greater economic activity, optimism about the future, and general economic confidence. However, too much of an increase and we could see the economy hampered as borrowing and lending dry up. I use interest rates as a general barometer of broad consensus of confidence and expectations in the markets. After all, bond investors are making 10, 20, and 30-year bets on the direction of interest rates and inflation.

DWA Statistics: I am always looking at the data provided by Dorsey Wright. Among the most important statistics is the New York Stock Exchange Bullish Percent (NYSEBP). I have discussed this particular statistic in numerous Updates in the past, and will not go into great detail here other to say that when the NYSEBP is rising and above 70% that is a very positive indicator of the strength of the stock market. During the first quarter of 2012, the NYSEBP increased from 53% to 74%. During March, the NYSEBP fell slightly but remains solidly positive. Should the NYSEBP fall below 70% it would signal a possible change in the general tenor of the markets and would be the first sign of caution.

I also watch the position and relative strength relationship of the five major asset categories tracked by DWA: US stocks, International stocks, Bonds, Commodities, and Currencies. How these five categories rank, how they are moving, and how fast they are moving, tell me a great deal about the underlying strength of the markets. As we start the second quarter, the US stocks category is solidly in first place followed by Commodities, Bonds, International stocks, and Currencies. The trend strength of Commodities and Bonds has been weakening recently so these major categories must be watched very closely to see if the trend further weakens or strengthens in the weeks and months ahead.

Europe: I believe that the problems in Europe are far from being resolved. The London-based Centre for Economic Policy recently announced that they believe the Euro zone fourth quarter 2011 GDP declined 0.3% and that trend was continuing into the first quarter (Wall Street Journal, March 30, 2012). The authors of the study cited austerity measures as a primary contributor to the contraction. A recession in Europe, even a slight recession, may negatively affect the region's major trading partners--the US and China. Investors will also be watching closely key elections scheduled for France and Greece in late April and early May. The existing leadership in both countries may be voted out to be replaced by candidates who have publicly challenged current agreements reached by both countries. This could jeopardize the fragile agreements in place and toss the region back into turmoil.

LOOKING AHEAD

As I previously noted, the US economy reminds me of watching a toddler riding a bicycle with training wheels-it is wobbly and uncertain, but moving generally forward. I believe this is precisely where we are today. Economic data is up, down, and everywhere in between. Time magazine's cover this past week is a perfect illustration of this point. Investors know that employment is improving, that the stock market is up, and housing may in fact be nearing a bottom, but why does it not feel better? I believe it is because unemployment remains high, political uncertainty creates stress, the mounting US debt appears to be unstoppable, gasoline prices are hurting families, and we are bombarded with negativity by a relentless 24-hour news cycle. Yet, the markets have been up and economic news is gradually improving. However, investors will continue to watch each economic data release to see if the economy is continuing to grow or running out of gas.

There are six important US economic data releases set this coming week. The most important is the March Employment Situation that will be released on Friday morning. Consensus calls for the overall unemployment rate to remain unchanged at 8.3% and a slight drop in the number of jobs created compared to February. This report is key because it signifies to many the general strength of the US economic recovery.

There have been no major changes to the relative strength analysis from Dorsey Wright (DWA). US stocks remains the strongest asset category followed by Commodities, Bonds, International stocks, and Currencies. US stocks retain a very sizable lead over the other categories with the others clustered closely together. The International stocks category remains the most improved by overall score change so far in 2012. There has also been no changes within the sectors of the major asset categories from previous weeks. Please refer to last week's Update for specific comments.

I will conclude this week's Update by reminding everyone of the importance of having a portfolio that meets your individual needs and risk tolerance. Investing is necessary for insuring your long-term financial health and well-being. Investing within your own circumstances is necessary to meet those long-term needs and the rate of return of your own portfolios are relevant in the context of your life, not someone else's.

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 ®, CRPC ® 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®,Member FINRA/SIPC, a Registered Investment Adviser.

Most major stock indices posted their year-worst weekly returns for 2012 on generally blah economic reports. Here in the US, new home sales for February fell a disappointing 1.6% from January to a seasonally adjusted rate of 313,000 units annually. Also troublesome was news that Chinese manufacturing and its broader economy were slowing. The week reminded

investors that economic recoveries, especially weak recoveries, are anything but a smooth ride to higher stock values.

For the week, the Dow Jones Industrial Average (DJIA) lost 152 points (-1.15%), the S&P 500 fell 7 points (-0.50%), and the Russell 2000 was flat losing just 0.02% for the week. The tech-heavy NASDAQ index was a notable exception gaining 0.41% for the week lifting this index to a 17.76% gain for 2012. By comparison, the DJIA is up 7.06% for the year, the S&P 500 is up 11.09%, and the Russell 2000 is up 12.03% so far in 2012. After 12 weeks of trading in 2012 the NASDAQ has only one down week (week 6, -0.06%), the DJIA has five down weeks, the S&P 500 only two, and the Russell 2000 has four.

Three major economic sectors posted gains last week: Consumer Discretionary, Consumer Staples, and Information Technology. Financials were flat, while Energy, Industrials, and Materials were the bottom three performers. For the year, the top performers continue to be Information Technology, Financials and Consumer Discretionary. Utilities, Consumer Staples, and Energy are the bottom three with only Utilities in negative territory down a little more than 3%.

International stocks continued their recent struggle especially the Asian/Pacific region and Emerging Markets. The broad, European-centric MSCI EAFE index fell 1.53% for the week while the Asia/Pacific region posted a 1.21% decline and Emerging Markets in general lost 2.57%. The Emerging Market sector within the international category remains up a strong 13.68% for the year despite being down over 4% so far in March. News of economic contraction in China is driving the pullback in that important sector and region of the world.

The Dow Jones UBS Commodity index posted a decline of 1.48% matching most equity indexes for the worst weekly performance in 2012. Gold managed a small improvement adding $6.60 (0.40%) to the price of an ounce of gold closing Friday at $1662.40. Analysts generally attributed the slight rise in gold prices to a declining US dollar and falling interest rates. WTI Oil fell slightly (-0.18%) to close the week at $106.87 masking a sharp run-up on Friday as news entered the market that Iranian oil exports have fallen recently. This news offset the general downward pressure on oil prices caused by a weakening US dollar and indicates that the fear-factor of an unstable Middle East is keeping oil prices extended. Cotton and Cocoa were the best performing commodities that I track while the highly volatile Natural Gas sector fell over 20% for the week. Other poorly performing commodity sectors last week include base metals (i.e. lead, tin, and nickel) and platinum. For the year, Natural Gas, Gasoline, and Platinum are the best performing commodity sectors while Coffee, Cotton, and Livestock are the worst.

The US dollar continued to lose ground last week falling a penny (-0.76%) against the Euro and the US Dollar Index fell 0.55% for the week. The drop can be attributed to the generally lackluster economic data from the housing market last week raising doubts about the overall strength of the US economy and recovery. Currencies in general have been a fairly subdued asset category for the year with the Euro up 2.55% and the Yen up 7.03% against the US dollar.

Bond markets were flat for the week with the Barclays Aggregate US Bond Index up just 0.1% for the week. US 10-year and 30-year Treasury yields fell for the first time in four weeks giving a boost to longer-duration bonds. The 10-year Treasury closed Friday at 2.234% down from the previous week’s close of 2.294%. German and French 10-year treasuries also fell for the week while Spanish and Italian 10-year debt jumped sharply. I believe the yield movements coming in from the key sovereigns around the world is troublesome. Drops in yields generally indicate a lack of confidence in economic growth while sudden jumps like those seen in Italy and Spain show a general worry about confidence in those countries. These trends must be followed closely. For the year preferreds, international inflation, and high-yield have been the best performing bond sectors while extended US Treasuries and corporate bonds have been the weakest.

FOLLOW ON TO LAST WEEK’S OBSERVATIONS

Last week I reviewed some general observations from the experts from First Trust Advisors and their generally bullish outlook on the US economy. I share their views that America is and will remain the leader of the world economically. I also believe that the business of America is business and that the more Americans are allowed to go about their daily lives unfettered by excessive interference the greater our success will be. That does not mean forsaking those less fortunate and unable to help themselves, we must strive to help those people—but we cannot shut down the economic engine that has made this country the greatest to ever exist in the history of the human race.

I have given much thought about the economic/jobs transition taking place in the US and abroad. The world is dramatically different then it was even a few decades ago. Technology has drawn all economies closer together and advanced transportation systems allow goods to travel freely around the world. Industries such as steel and agricultural production, which were once focused wholly on domestic consumption, are now international in scope. Capital investment has been able to seek out its most productive use. Looking at statistics from the Bureau of Labor Statistics and the United Nations, the average US worker is 3 times more productive than he was in 1972, and the US leads all other nations in industrial output. In 2009 the US manufacturing output was equivalent to the output of the 3rd through 17th ranked countries combined! (Source: United Nations, “The Demise of American’s Manufacturing Sector Has Been Greatly Exaggerated,” by Mark Perry, the EnterpriseBlog, January 20, 2011). The jobs market today looks dramatically different from the jobs market of the 1960’s or 1970’s, and education is becoming a critical asset for American workers using the most sophisticated manufacturing processes here at home.

My belief is the employment challenges facing our government leaders may be tougher than they realize. Transitions are never easy and frequently unrecognized until well into the process. The days of a semi-educated worker finding a well paying job to support a family are becoming fewer and fewer. A premium will be paid for those workers who can handle sophisticated manufacturing techniques and those who cannot will be pushed further to the economic edge of society. The government must focus more

of its efforts and resources towards the effective education of Americans—especially to the very young, so every American can find meaningful and well-paying jobs. This is the challenge facing all of us, but one I believe we can meet. America will continue to be the most productive and innovative country in the world.

Speaking of transitions, I would like to take a brief moment to recognize a good friend, Capt. Alan Oshirak, of the United States Navy who retired this past Friday following 30 years of truly exceptional service to our great Nation. Alan and his family have carried the burden of sacrifice that is associated with a soldier and sailor’s life—frequent separations, extremely hazardous duties, and an unknown future--with great strength and humility. I want to publically thank Alan for his service and wish him continued success going forward.

LOOKING AHEAD

The past week showed that the US economy is still on some shaky ground. The US housing market is not as strong as hoped and is holding back parts of the economy. The employment numbers are improving but not in the quantity that would indicated a strong, sustained, and improving recovery. However, the data is still ok and growth is still occurring. I remain concerned about high oil prices and the effect these prices will have on the average family. Additionally, I am watching interest rates, both here and abroad, very closely. I think interest rates are an important indicator to how investors view the markets today and tomorrow. There have been no major changes to the relative strength analysis from Dorsey Wright (DWA). US stocks remains the strongest asset category followed by Commodities, Bonds, International stocks, and Currencies. US stocks retain a very sizeable lead over the other categories with the others clustered closely together. The International stocks category remains the most improved by overall score change so far in 2012.

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, Health, Energy, Consumer Staples, Materials, Industrials, Telecom, and Utilities. 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 in order to get more yield. 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.

Economic reports being released this week will cover a variety of data points. The highlights include Consumer Confidence on Tuesday, Durable Goods Orders on Wednesday, the final revision of the 4th Quarter, 2011 Gross Domestic Product on Thursday along with initial jobless claims, and Personal Income and Outlays on Friday. A review of consensus expectations of the data shows expectations to be relatively flat for most of the data--no expected surprises on the upside or downside. The one exception is with the data due to be released on Friday covering personal income and spending. Both income and spending is expected to rally strongly for February and is an important barometer of sustained economic growth.

Sincerely,

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

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

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

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

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 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. 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.

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.

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 generally are 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.

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.

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 and is a capitalization-weighted index meaning the larger companies have a larger weighting of the index. The S&P 500 Equal Weighted Index is determined by giving each company in the index an equal weighting to each of the 500 companies that comprise 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 Russell 2000 Index Is comprised of the 2000 smallest companies of the Russell 3000 Index, which is comprised of the 3000 biggest companies in the US. The NASDAQ Composite Index (NASDAQ) is an index representing the securities traded on the NASDAQ stock market and is comprised of over 3000 issues. It has a heavy bias towards technology and growth stocks.

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.

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