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

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

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

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

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

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

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

INCREASE IN JOBLESS CLAIMS OFFSETS GAINS FROM MERGER AND ACQUISITION ACTIVITY

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

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

EUROPE CONTINUES TO STRUGGLE

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

Looking Ahead

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

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

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

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

Gold remains my hedge against uncertainty.

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

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

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

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

Sincerely,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LOOKING AHEAD

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

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

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

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

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

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

Sincerely,

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

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

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

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

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

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

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

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

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

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

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

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

RENEWED STRENGTH IN STOCK MARKETS

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

My caution comes from a number of concerns:

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

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

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

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

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

STRESS TESTS RESULTS FROM EUROPE

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

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

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

Looking Ahead

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

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

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

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

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

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

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

Sincerely,

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

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

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

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

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

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

Weekly Market Update July 5, 2010

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

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

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

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

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

LITTLE GOOD NEWS ON THE ECONOMIC FRONT

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

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

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

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

NEWS FROM EUROPE IMPROVED

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

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

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

Looking Ahead

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

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

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

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

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

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

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

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

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

Sincerely,

Paul Merritt, MBA, AIF(R). CRPC(R)

Principal

NTrust Wealth Management

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

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

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

All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2, 5, 10 and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S. stocks traded on the major exchanges around the globe. Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser. Forward email This email was sent to paul@ntrustwm.com by paul@ntrustwm.com. Update Profile/Email Address | Instant removal with SafeUnsubscribe™ | Privacy Policy. Email Marketing by NTrust Wealth Management | 780 Lynnhaven Parkway | Suite 190 | Virginia Beach | VA | 23452 Send a test version of your email to yourself, and to others including a personal message. Up to 5 addresses may be entered separated by a comma ",". Email Address(es): paul@ntrustwm.com (Separate multiple addresses with a comma ",") Personal Note: Send both HTML & Text versions View HTML Version View Text Version View Printable Version

Market Update - June 27, 2010

After two up weeks markets reversed themselves amid a spate of negative economic news.

For the week, the Dow Jones Industrial Average (DJIA) lost 307 points (-2.94%) closing at 10,144. The S&P 500 lost 3.65% closing at 1077 flirting again with the important support level of 1050. For the year the DJIA is now down 2.73% and the S&P 500 is down 3.44%.

The MSCI (EAFE) World lost 2.62% and remains down double digits for the year losing 12.57%. The Euro was essentially flat losing just $0.0007 for the week closing at $1.2377.

Oil rallied and closed the week at $78.86 reflecting concerns over low gasoline inventories in the US and a brewing storm in the Gulf of Mexico that could possibly disrupt oil production and refinement in this critical region. Gold gained just over $27 per ounce closing the week at $1256.20. Gold rallied on the negative economic data reported during the week. Base metals continued to rebound strongly following the appreciation of the Chinese yuan.

Prices of US treasuries gained and sent the 10-year rate down to 3.1096% from last Friday's close of 3.2328%. This interest rate is the lowest Treasury yield weekly close so far in 2010 and reflects continued concerns about US and global economic growth. Corporate bonds also showed strength and most bond categories gained in value during the week.

ECONOMIC CONCERNS RESURFACE

As I discussed last week, investors are searching for confirmation that economies around the world are stabilizing and growth is returning.

This search hit a snag as the US government revised the final 1st Quarter GDP number down to 2.7% from April's initial report of a 3.2% gain. Additionally, new home sales in May reached a record low and with inventories of existing homes at very high levels, it may take several years to restore a balance in supply and demand within this important sector. Capping all of this news was the Federal Reserve's statement on Wednesday which was interrupted to suggest that economic growth, while present, is not particularly robust and that low interest rates will be with us for the foreseeable future. Internationally, the cost of insuring Greece's sovereign debt has reached record levels implying that private investors now consider the likelihood of default within the next 5 years at 69%. This makes Greece the second worst bet (behind Venezuela) among all countries.

POLITICS AND THE ECONOMY

The long-anticipated Financial Reform Bill emerged from conference and appears ready for the President's signature.

Bank stocks rallied on Friday after initial details revealed that some of the most draconian constraints on banking were reduced or eliminated. As far as the long-term impact on the financial system, we will have to follow Sen. Dodd's observation when he suggested that we would have to wait and see how the 2000+ page bill works out.

The G20 Summit has been taking place over the weekend in Toronto and it appears that a general consensus has emerged where the world leaders have agreed to take steps to reduce debt levels in half by 2013 and that countries should not rapidly withdraw stimulus spending until economic growth is firmly in place. A key differential is that countries like Germany plan to reduce their deficits by austerity measures, while the US expects economic growth to help reduce the percentage of deficits in relation to GDP. Most developed countries agreed that a global bank tax should be imposed to help pay for the bailouts to these banks; however, Canada, Brazil and India oppose this measure. It remains to be seen if any of these goals will be met. China was praised for allowing the yuan to float and help generate exports to that country. I will be following the yuan now over the weeks and months to come to see if our exports improve as a result.

Looking Ahead

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

There are many different opinions about the direction of the economy and for each economist who believes there is a chance of a second recession (double dip) there is an economist who believes that corporate profits will rise dramatically next year and we could see strong market growth. I reiterate that I do not know which view will prevail, but I will react accordingly. One of the very big advantages to following a relative strength strategy is that this investing strategy is not based on a hunch or gut instinct, but rather firm data points indicated by the analysis provided by Dorsey Wright & Associates (DWA).

Currently major indicators continue to support over-weighting cash and bonds while some equity positions can be taken in technically sound investments. An encouraging sign last week was that as the major indexes lost across the board, the underlying technical indicators like the New York Stock Exchange Bullish Percent (NYSEBP) did not lose and remained steady.

The markets are presently range bound. The DJIA has support at 9800 and resistance at 10,900, while the S&P 500 has support at 1050 and resistance at 1170. In other words there is simply no clear direction in the markets.

Favored sectors include Aerospace Airline, Machinery and Tools, Real Estate, Restaurants, and Savings & Loans. Only strong technical positions should be entered in these or any sector. Broad market investments continue to favor the small and mid cap sectors in the US; and internationally, emerging markets continue to show greater relative strength over developed ones.

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

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

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

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

Sincerely,

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

Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be obtained. Technical analysis is just one form of analysis. You may also want to consider quantitative and fundamental analysis before making any investment decisions. Information in this update has been obtained from and is based upon sources that NTrust Wealth Management (NTWM) believes to be reliable, however NTWM does not guarantee its accuracy. All opinions and estimates constitute NTWM's judgment as of the date the update was created and are subject to change without notice. This update is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities must take into account existing public information on such security or any registered prospectus. The bullish percent indicator (BPI) is a market breath indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group. The basic rule for using the bullish percent index is that when the BPI is above 70%, the market is overbought, and conversely when the indicator is below 30%, the market is oversold. The most popular BPI is the NYSE Bullish Percent Index, which is the tool of choice for famed point and figure analyst, Thomas Dorsey. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2, 5, 10 and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S. stocks traded on the major exchanges around the globe. Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser.

Weekly Market Update - June 20, 2010

The never ending search for some verification, some confirmation that economic growth is here to stay has begun to consume investors much as it seems Ponce de Leon was consumed by his search for the Fountain of Youth. It appears that investors received something of a sign this past weekend in the form of a policy change from Beijing...but I get ahead of myself.

The stock markets had another good week. The DJIA gained nearly 240 points (+2.35%) closing at 10,451. The S&P 500 also gained 2.37% closing at 1118. Both of these major indexes have now posted two 2%+ weeks back to back-the best for 2010. For the year, both the DJIA and S&P 500 are now positive again up 0.22%. Nearly all of the gains of the week occurred on Tuesday with the other four trading days very subdued compared to recent volatility. Not even the Quadruple Witching on Friday stirred much movement in the markets.

The MSCI (EAFE) World gained an impressive 4.15%, but this broad international index continues to trail both major US indexes on an absolute basis. For the year, the MSCI (EAFE) is down 10.22%.

The Euro rebounded for the second week in a row closing at $1.2384 up from last week's close of $1.2116. This rebound comes despite news all during the week in which Spanish banks were seen as under real pressure due to their increasing difficulty in obtaining short-term loans from other banks. EU economic policy makers are dealing with this problem as well as the overall strength of banks from other EU countries. Expect to see more news on this subject in the coming weeks-for now it has returned to a back-burner issue.

Oil has rallied as the dollar weakened against other currencies. By the end of the week oil was back over $75 per barrel. There are no signs that the upward price pressure on oil is abating.

Gold settled on Friday at record levels closing at $1257.20 up $27 (+2.2%) for the week. Uncertainty in the financial markets remains the basis for gold's strength.

Prices of US treasuries gained slightly dropping the 10-year rate down to 3.2250% from 3.2328%. General fears around the world continued to push investors into US treasuries. Corporate bonds continued to provide small, but positive gains for the week.

THE ELUSIVE SEARCH FOR GROWTH

In general, the economic news of the week was not good.

Jobless claims were unexpectedly higher, housing starts and permits tumbled in May, the Philadelphia Fed's general economic index fell to a 10-month low, and Spain's banking problems all signaled slower than desired economic growth. Yet, the markets held on to their early week gains and posted a positive week. As I said last week, the fact that the S&P 500 held at 1050 and the DJIA at 9800 were very good signs. Additionally, the short-term indicators that I follow have turned positive meaning that I will be looking to add selected high-quality equity positions in portfolios. The longer-term indicators are still cautious, but this has been the first time in many weeks that the equity markets have shown some short-term strength.

CHINA ANNOUNCES DECISION TO LET YUAN FLOAT MORE FREELY

The biggest economic news over the past week was this weekend's announcement by China that Beijing was willing to loosen the tight link to the US dollar.

The US and other developed nations have been pressing China to decouple the Yuan from the US dollar. Critics of China's policies have argued that by keeping the Yuan artificially low, China was undermining global trading by undervaluing their exports to the US and other countries and keeping prices of imports artificially high. The Bulls see this as a long-term positive development enabling US manufacturers to be more competitive in the Chinese markets, while the Bears say that this will do little to fix the longer-term nature of the economic problems in the US and other developed countries-most notably high government spending and excessive national debts.

What is most likely to happen will be that basic commodities like oil, gas, and metals will rise in price as China uses a cheaper Yuan to purchase these goods on the open market. Whether a more expensive Yuan translates into greater exports to China remains to be seen. I would also expect prices of some US goods to rise given the amount of products we consume which are manufactured in China.

Finally, the Chinese decision to act on the Yuan issue over this past weekend will have a major impact on the G20 Summit starting this Saturday, June 26th, in Toronto. The Yuan/US dollar issue was expected to be a major topic of the meeting. Now that is off the table and I believe the Chinese deftly moved the agenda away from them and back to the US and EU.

Looking Ahead

The news from China is certainly significant and I would expect to see a positive reaction to the news near-term. As I have stated, the short-term Dorsey Wright & Associate indicators that I follow have also been turning positive over the past few days. Good signs for now. It is yet to be determined if the news from China will be sufficient to push stocks back into an emphasized status on the longer-term indicators. For now the favored asset categories remain Cash and Bonds.

I remain focused on very strong technical stocks and sectors. Small cap and mid cap remain favored on a broad market basis so you can keep exposure there. Emerging markets are showing greater relative strength compared to developed ones. Real estate continues to be a strong sector play within the US as has the oil services sector.

Treasuries are very strong; however, I remain extremely concerned that treasuries are very expensive at this point in time and new positions should be entered into thoughtfully. Expect some weakness for now as investors move away from US treasuries in favor of more risky assets. I continue to favor US Corporate Intermediate-term bonds and some international bond exposure. I also believe that short-term bonds can be a good alternative to cash.

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

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

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

Sincerely,

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

Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be obtained. Technical analysis is just one form of analysis. You may also want to consider quantitative and fundamental analysis before making any investment decisions. Information in this update has been obtained from and is based upon sources that NTrust Wealth Management (NTWM) believes to be reliable, however NTWM does not guarantee its accuracy. All opinions and estimates constitute NTWM's judgment as of the date the update was created and are subject to change without notice. This update is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities must take into account existing public information on such security or any registered prospectus. The bullish percent indicator (BPI) is a market breath indicator. The indicator is calculated by taking the total number of issues in an index or industry that are generating point and figure buy signals and dividing it by the total number of stocks in that group. The basic rule for using the bullish percent index is that when the BPI is above 70%, the market is overbought, and conversely when the indicator is below 30%, the market is oversold. The most popular BPI is the NYSE Bullish Percent Index, which is the tool of choice for famed point and figure analyst, Thomas Dorsey. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poors. The Dow Jones Industrial Average is based on the average performance of 30 large U.S. companies monitored by Dow Jones & Company. The Dow Jones Corporate Bond Index is comprised of 96 investment grade issues that are divided into the industrial, financial, and utility/telecom sectors. They are further divided by maturity with each of the sectors represented by 2, 5, 10 and 30-year maturities. The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index is a broad-based index composed of non U.S. stocks traded on the major exchanges around the globe. Securities and Advisory Services offered through Commonwealth Financial Network(R), Member FINRA/SIPC, a Registered Investment Adviser.

Weekly Market Update - June 14, 2010

The US markets rallied this week with an especially strong Thursday giving the Dow Jones Industrial Average (DJIA) its first up week in a month.

For the week, the DJIA gained 279 points (+2.81%) closing at 10,211. The S&P 500 also gained 2.51% closing at 1192. Nine trading days into June (of 22) the DJIA is up 0.73% and the S&P 500 is up 0.20%.

The MSCI (EAFE) World gained 1.06%, but this broad international index continues to trail both major US indexes on a relative basis. For the month, the MSCI (EAFE) is still in negative territory down 0.3%. The Euro rebounded a bit closing the week at $1.2116 up from last week's close of $1.1973. Oil pulled back on Friday to $73.78 after rising to over $75 per barrel on Thursday. Some analysts I follow suggested that this downward move in oil was attributed to the negative retail sales number that came out Friday morning fueling (no pun intended) concerns that economic growth is not as substantial as hoped. It appears that the price of oil is becoming a barometer of anticipated future economic growth rather than being based upon traditional supply and demand fundamentals. Gold gained just over $8 per ounce closing the week at $1230.20. Yet again it appears that gold is gaining as an attractive alternative to stocks and currencies. Base metals rebounded strongly on news of China's good export data renewing optimism that this largest consumer of metals such as copper, nickel, and lead would resume buying after a month or two slow down. Prices of US treasuries fell slightly pushing the 10-year rate up to 3.2328% from 3.2077%. Treasury prices did rise on Friday after the release of the retail sales numbers. For the week, strongest gains in bonds were found in long-term US treasuries, investment grade corporate bonds, and emerging sovereign debt.

STOCKS STABILIZE

As noted, the DJIA found a return to winning ways this past week with the year's second best weekly gain. The S&P 500 had its fourth best week.

The rally was attributed to strong export data reported by China. As the world's manufacturer, investors believe that the strong export data reflects continued global demand for products and is a leading indicator of economic strength elsewhere. With this news, money rushed into the markets driving up stock prices and reversing, for now, a negative trend in the markets. Additionally, a slightly favorable report on new jobless claims helped fuel the rally. Investors are hanging on any news to get confirmation that the US and global economies are recovering.

NEWS FROM CHINA AND ELSEWHERE

The stronger than expected export data reported by China this past week certainly pleased investors. What was less auspicious was the report that China's inflation grew at an annualized rate of 3.1% in May.

The Chinese government has a publicly stated policy of keeping inflation at or below 3%; but with recently approved wage increases for workers throughout China and negative real interest rates, there is going to be increasing demand on China to raise interest rates and slow their robust economy. This is an important story I will be following closely.

A report released on Sunday, June 13th, by the Bank for International Settlements showed that France and Germany have the most to lose if Greece, Ireland, Portugal and Spain are forced to default on some or all of their debt. Between the two, France and Germany own $1.58 trillion of debt. Expect France and Germany to remain as the only two real players in the Euro Zone's debt crisis. For now it appears that the bailout package has indeed given leaders time to work through these debt issues.

The oil leak continues in the gulf. What more can I say. Every talk show on TV and radio is covering this event around the clock. Let us all hope that the well gets capped and the oil clean-up saves the regional environment. In case you were curious, BP and Transocean have each seen their stock prices crushed. Over the past 30 days, BP has lost over 30% in value and Transocean has lost 32%. There continues to be a lot of risk surrounding these two companies.

Looking Ahead

While I was pleased to see the markets have a good week, I remain cautious and defensive at this time.

Both the S&P 500 and DJIA held above important support levels last week-1050 for the S&P 500 and 9800 for the DJIA. Both indexes have moved well above these numbers relieving some of the pressure weighing on stocks. The New York Stock Exchange Bullish Percent (NYSEBP) gained slightly for the week closing at 39.08. Remember that this number is calculated by looking at every stock traded on the New York Stock Exchange and seeing if the stock is in a point and figure buy or sell signal. Adding up all of the stocks in a buy signal and dividing by the total number of stocks gives us the Bullish Percent. Anything above 70 is considered overbought, below 30 is oversold, and in between is considered the normal range for stocks. For now the number is telling me that the risk level for stocks has been reduced significantly from just a month or so ago when the NYSEBP was above 80%.

There have been a couple of sectors that continue to outperform and it is there I am looking for ideas when the green light comes back on for stocks. Real estate, consumer discretionary and technology continue to hold the top sector spots on a relative strength standpoint. Looking at the market in broader terms, emerging markets are showing renewed strength and small and mid-cap stocks remain on top from a relative strength standpoint. Commodities, while strong performers this past week, continue to remain very volatile and should be considered in small doses and only if you have the stomach for such gyrations in a portfolio.

There has been no change to the broad asset class indicators that I follow. Bonds and Cash are favored so I continue to recommend investment in quality bonds, especially corporate intermediate-term. You can continue to hold strong relative strength equities, but you must be very selective and make sure your positions are the trending above their peers. If you have any questions about the strength of any holdings you may have, please give me a call and I will review each with you.

Treasuries are very strong; however, I remain extremely concerned that treasuries are very expensive at this point in time and new positions should be entered into thoughtfully.

On a final note, this Friday (June 18, 2010) will be the second Quadruple Witching this year and occurs when stock options, index options, index futures, and single stock futures all expire on the same day. Historically the week of Quadruple Witching is accompanied by greater volatility so don't be surprised if the recent volatility is extended into this week.

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

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

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

Sincerely,

Paul Merritt, MBA, AIF(R). CRPC(R)

Principal

NTrust Wealth Management

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

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

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

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

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