newsletter 10052015 final volume 1 issue 15

Copyright © 2015 EQS Capital Management LLC, See important disclosure on last page

All rights reserved. 1 www.eqstrading.com

SIGNALS

Well it is 2015, and

according to “Back to

the Future II,” the

Cubs are going to win

the World Series. Holy

Cow! What do you

know, the Cubs made

the play offs! The

Cubs still have a very

long way to go, and

you can’t bank on

crystals balls and

movies for predicting

the future, as it does-

n’t look like we will all

be driving flying cars

powered by Mr. Fusion by the time the 2015

World Series champ is crowned.

If 1980s movies about time travel can’t

predict the future, then what are we to do as

traders? The first thing is to put the past

behind, Q3 of 2015 is now in the books, and

as they say “past performance is not an

indicatory of future returns.” With that said

let’s look to the future, and see if we can

make sense of what has been happening in

the market and where we go from here.

It is nothing new that cheap commodities

are good for consumers and the American

consumers love to spend as the US econ-

omy remains one of the few bright spots in

the global market. Low gasoline prices

have the US consumer feeling good as they are buy-

ing electronic gadgets (thanks Apple) and automo-

biles (just not VW’s) at near an all-time record clip.

September auto sales numbers were blockbuster

(the Labor Day weekend numbers were counted in

September this

year and they typi-

cally are recorded

in August num-

bers), which gave a

nice boost to Wall

Street and com-

modities.

(continued on Page

2)

BA D I S GOO D , A ND GO O D I S BA D ( T H E M A R K E T I S S A V E D B Y N O T C R E A T I N G J O B S )

Prices hit the Natu-ral Gas price target set on 9-21-15, as NG hit a fresh three-year low on 10-1-15

I N S I D E T H I S I S S U E :

Bad and Good Cont. 2

Oil and Products 3

Natural Gas 4

About EQS 5

Terms and Disclosures 6

E Q S T R A D E R E C O M M E N D A T I O N S

T H E S O U R C E

F O R C O M M O D I T Y

T R A D I N G S I G N A L S

Volume 1, Issue 15 October, 5 2015

A Weekly Publication on the Commodity Markets

©



Despite the nice rally, there was more concerning data and news that came out

which continues to add to the long term bear case. In case you missed our radio

interview we are fed up with the FED! Since we don’t yet know if the Cubs can win

the World Series, let’s shift our predictions to what is going to happen with the FED

and what they will do with interest rates when they meet again on October 27-28th.

The FED typically focuses on infla-

tion and jobs (wages) which came

in well under expectations, and

after the report most of the Street

changed hike expectations until

early 2016. Since the FED made it

known last month that they are

watching economies around the

world and have concerns about the

global economy, we turn back to

Europe and Asia.

We featured Volkswagen in the last

issue of “Signals,” and the diesel

scandal is the last thing that the Germans and thus the European economy want to

discuss as they are still trying to pull out of their weakness that has been propped

up by Central Bankers since the Great Recession. This week the European woes

moved from Germany to London as Swiss based Glencore (and acronym for Global

Energy Commodity Resources) the 10th largest company in the world and one of the

largest producers and marketers of commodities in the world lost a third of its value

as investors hit the panic button about a possible de-

fault. Glencore sprang into action, created some li-

quidity, tidied up their balance sheet, and was able to

rally the stock back to erase the losses, but is still

down about 2/3 for the year.

China will be closed for a week (October 1-7th) for Na-

tional Day, and according to the WSJ investors have

already pulled $40 billion from emerging-market

stocks and bonds in the third quarter in response to

China's effect on their economies. That is the biggest

outflow since the fourth quarter of 2008, during the

height of the financial crisis. Prior to the Chinese holi-

day their PMI numbers were released, and they were

awful! As signs of China's slowdown bleeds to the US

and the rest of the globe it could be seen as the disas-

ter that tips the whole global economy, or it could trigger the next round of global

stimulus.

Not only will the Fed be watching China, but as we have reported Japan now spends

35% of their total Government revue just to service the interest on their debt. Amer-

ica is not far behind, but a major disaster was adverted at the 11th hour when Gov-

ernment shutdown was averted on Oct 1st as politicians were able to kick the can

down the road again so we could keep charging up the debt ceiling.

Only time will tell if “Back to the Future II” is right and the Cubs can win capture the

2015 World Series. Unfortunately we don’t have a DeLorean that travels through

time, but whatever happens there are always opportunities whether markets are

rising or falling, it just helps to know the facts, know the risks, know the rewards,

and put emotions behind and make some money in Q4!

GO O D A N D BA D…(C ON TI N U ED )

As signs of China's

slowdown bleeds to the

US and the rest of the

globe it could be seen as

the disaster that tips the

whole global economy, or

it could trigger the next

round of global

stimulus.

http://www.focusresourcesinc.com/commodities-markets-economics-and-main-street/

http://www.focusresourcesinc.com/commodities-markets-economics-and-main-street/

http://www.slideshare.net/JonathanMLamb/newsletter-092115-final-volume-1-issue-14

http://www.slideshare.net/JonathanMLamb/newsletter-091415-final-volume-1-issue-12?related=1



Well, we have moved from Groundhog Day to Groundhog Week, since we are stuck right back where we

started. Oil remains range bound despite strong bear news, as the equity bulls are just too strong to keep it

from falling.

We have been long term bears

on the commodity sector and oil.

We have been pointing out for

months the bearish hurdles that

the markets must overcome to

keep economies around the

world from slowing down, or

recessing. However, on Monday

the 28th, the EQS system recom-

mended a “long” call on oil and

the products markets, which has

posted some nice gains for EQS

Trading subscribers.

The Consumer Confidence num-

ber helped kick off the rally but

we were cautiously optimistic the

bulls could keep the rally going to

end the month and quarter, but

rallies in equites and the global

market were able to keep oil

from crashing as the EIA inven-

tory gave the bears every reason

to bring the party to an end once

and for all, but the tides were just

not strong enough yet to kill the

bulls.

It looked like the disastrous Jobs

Report that came out on Friday

was going to break the bulls.

Going into the job report oil prices

were up almost 1%, and after the

report was issued prices torpe-

doed down. As the day pro-

gressed the market realized that

that bad jobs data would likely

delay a FED hike until 2016 at

the earliest, and will likely give

more merit to more global stimu-

lus, and with that the bulls again

started buying and were able to

bring prices back over $45 to end

the week.

We continue to remain cautiously bullish. The market will eventually roll over and test the August lows, but

as the bulls work overtime we will enjoy rides up as we get them, and keep tight stops to stay protected

when those lows are retested.

Oil: STILL Range Bound

Oil and Refined Products

EIA inventory gave the

bears every reason to

bring the party to an end

once and for all, but the

tides were just not strong

enough yet to kill the

bulls.

Bullish



NG hit the lowest settlement since June 13, 2012,

as prices reached $2.433 to start the new month

and quarter.

As we reported in Signals back on September

21st, we would be testing the $2.44 April low, and

we kicked off the quarter with prices below that

April low, and hit a new three year low on the sel-

loff.

With an already soft fall

power demand, Hurricane

Joaquin took any hopes of

a rally out of the question

for the week, as cool rainy

weather blanketed the

east coast and put the

brakes on power demand.

The U.S. Energy Informa-

tion Administration said

Thursday morning that

producers added 98 bil-

lion cubic feet of natural

gas to storage in the week

that ended Sept. 25. It

follows a 106-bcf addition

last week, the largest

weekly additions since

early June. The EIA also

reported gas production in

NATU RA L GA S , HOW LOW CA N WE GO?

Bearish

Natural Gas

the continental U.S. was virtually unchanged in

July despite prices that have lingered near that

three-year low all summer before we finally

broke through the low on Thursday. Total with-

drawals were 82.32 billion cubic feet that

month, compared to 82.29 in June. Production

in July was 5.4% above the same period a year

ago.

Consumption

decreased... led by a

15% decline in

natural gas used for

power generation.



Why You Need EQS

From technicals to fundamentals to macroeconomics, analyzing com-

modity markets can be a daunting task. Let EQS do the work for you.

Through its subscription service, EQS Trading provides traders and

hedgers easy to follow trading signals for major commodity futures mar-

kets, including crude oil, natural gas, gold, silver and many others. Now,

strategies used by institutions and hedge funds are at your fingertips.

The subscription service includes both daily trading signals and the

weekly Signals Newsletter, which provides in-depth insight to the com-

modity markets.

EQS Capital Management also offers a commodity hedge fund (EQS

Commodity Fund LLC), which employs the same signals in its subscrip-

tion service in a private placement fund for accredited investors and

institutions. Because EQS uses a “long” and “short” strategy, it is de-

signed to

generate

returns,

regardless

of which

way the

market is

moving.

EQS

Commod-

ity Fund

imbeds strict risk management principles through diversifying its portfolio

(energy, metals, and agriculture) and actively managing stop loss limits.

What is EQS?

Economic Quantitative Strategy (aka EQS) is an investment and trading

strategy that translates economic data and technical indicators into price

direction for

commodi-

ties. Be-

cause of its

quantitative

nature,

EQS has

been rigor-

ously back-

tested with

15 years of

historical

data to

ensure the

strategy works in a variety of market conditions. Furthermore, because

the global economy changes over time, EQS employs dynamic parame-

ters that evolve as the market changes.

About Us

Who is EQS?

Richard C. Rhodes

Mr. Richard C. Rhodes is the President and Founder of EQS Capital

Management LLC. Richard has a Bachelor of Science with honors in

Mechanical Engineering from Texas A&M University and an MBA

from Duke University. He brings almost 25 years of diverse energy

experience, covering all phases of the oil and natural gas value chain

from producer to end-user. Richard is a li-

censed Series 3 CTA (Commodity Trading

Advisor) with the Commodity Futures Trading

Commission and a member of the National

Futures Association.

Richard began his professional career on a

drilling rig in West Texas with Conoco Explo-

ration and Production. Richard continued his

oil and gas career with Koch Industries

(ranked as one of the largest privately-owned companies in the U.S.)

where he worked in midstream, refining, pipeline, and distribution

operations. During his eight years with Koch Industries, Richard be-

gan as an operations engineer and later found his true passion in

trading, which leveraged his professional interests in mathematics

and economics. Richard joined Duke Energy in 2002, where he spent

ten years working in the energy trading department and earned The

Pinnacle Award, the company’s highest honor. Richard then left Duke

Energy to launch EQS Capital Management in 2012.

Jonathan M. Lamb

Mr. Jonathan M. Lamb is the Director of Business Development at

EQS Trading. As a four year varsity hurdler

on the track team at Ball State University,

Jonathan earned Bachelor of Science de-

grees in Risk Management, Insurance, and

Economics, and started working on his PhD

in Economics at North Carolina State Uni-

versity before focusing on business and

trading.

As part of the first wave of Millennials to

join the work force, Jonathan started his

professional career almost 15 year ago,

joining ACES Power Marketing as an Operations Specialist, providing

demand side economics for Co-Op Power Providers before becoming

a Real-Time Electricity Power Trader. He continued his career trading

power for seven years with Progress Energy (now Duke Energy, the

largest utility in the nation) as a Senior Real Time Trader. Jonathan

then opted to become an entrepreneur and started a consulting firm

specializing in finance and economics, owning and running seven

different small businesses before joining EQS in 2015.



EQS Trading

A Division of EQS Capital Management, LLC

8480 Honeycutt Road, Suite 200

Raleigh, NC 27615

Phone: 919.714.7453

www.EQStrading.com

E-mail: [email protected]

Your use of this subscription is governed by these Terms and Conditions. You may print the documents published in hard copy for internal reference purposes, but not for any other purpose. Specifically, you may not copy, reproduce, distribute or modify the content. The information may be changed by EQS at any time without notice. While EQS will use reason-able efforts to ensure that the information is accurate and up to date, no representations or war-ranties are given as to the reliability, accuracy and completeness of the information. This material has been compiled and presented as general information, without specific regard to the particular circumstances or risks of any company, institution, or individual. It is not in-tended as, nor should it be construed to be, investment advice. In no event will EQS, its affili-ates, nor any of its officers, partners or employees be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of it, or in any connection with, your use of the Sub-scription or the failure of performance, error, omission, interruption, delay in operation or trans-mission. Use of the Subscription Service shall be governed by all applicable Federal laws of the United States of America and the laws of the State of Delaware. The user hereby acknowledges and agrees that EQS may be harmed irreparably by any violation of this Agreement and that EQS shall be entitled to injunctive relief to enforce this Agreement. The information contained has been prepared solely for informational purposes and is not an offer to sell or purchase or a solici-tation of an offer to sell or purchase any interests or shares in funds managed by EQS. Any such offer will be made only pursuant to an offering memorandum and the documents relating thereto describing such securities.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RE-SULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESEN-TATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMI-LAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPO-THETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RE-SULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HY-POTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN AD-VERSELY AFFECT ACTUAL TRADING RESULTS. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THERE-FORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FI-NANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. THE REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") REQUIRE THAT PROSPECTIVE CLIENTS OF A CTA RECEIVE A DISCLOSURE DOCUMENT WHEN THEY ARE SOLICITED TO ENTER INTO AN AGREEMENT WHEREBY THE CTA WILL DIRECT OR GUIDE THE CLIENT'S COMMODITY INTEREST TRADING AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED. YOU MAY REQUEST A COPY OF THE DISCLOSURE DOCUMENT BY EMAILING EQS. THE CFTC HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR ON THE ADEQUACY OR ACCURACY OF THE DIS-CLOSURE DOCUMENT. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIG-NIFICANT ASPECTS OF THE COMMODITY MARKETS. THEREFORE, YOU SHOULD PROCEED DIRECTLY TO THE DISCLOSURE DOCUMENT AND STUDY IT CAREFULLY TO DETERMINE WHETHER SUCH TRADING IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. EQS CAPITAL LLC IS A CFTC REGISTERED COMMODITY TRADING ADVISOR AND COMMODITY POOL OPERATOR. PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH POOLS WHOSE PARTICIPANTS ARE LIMITED TO QUALIFIED ELIGIBLE PERSONS, AN OFFERING MEMORANDUM FOR THIS POOL IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A FUND OR UPON THE ADEQUACY OR ACCURACY OF AN OFFERING MEMORANDUM. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT RE-VIEWED OR APPROVED THIS OFFERING OR ANY OFFERING MEMORANDUM FOR THIS FUND. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EX-CHANGE COMMISSION (THE “SEC”) OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS AS A

T H E S O U R C E

F O R C O M M O D I T Y

T R A D I N G S I G N A L S

TERMS and DISCLOSURES

newsletter 10052015 final volume 1 issue 15

Documents