The document discusses the Federal Reserve's decision to not raise interest rates at their most recent meeting, effectively continuing their "Groundhog Day" of keeping rates near zero since 2008. This created more uncertainty for markets. The author argues the Fed lacks clear direction and their inaction implies greater risks to the economy. Markets now do not expect a rate hike until March 2016 at the earliest. The document also discusses bearish factors for oil prices despite an earlier inventory draw, as total inventories and days of demand coverage rose significantly, indicating oversupply.

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All rights reserved. 1 www.eqstrading.com
SIGNALS
Does it feel like Groundhog Day? No, not
February 2nd, but the 1993 Bill Murry clas-
sic film “Groundhog Day.” Since December
16, 2008 we have had the Fed benchmark
rate pegged at 0-0.25%, and Thursday all
eyes were on Janet Yellen and the Fed to
await the announcement of whether the
economy had again seen its shadow or if it
would finally be time for lift off.
Like Phil Connors (Bill Murray), we are left
living the same time-loop, but unlike audi-
ences that love watching the movie over and
over, the market is just plain tired of the Fed
drama. After the release of the Fed
minutes, Yellen held a press conference
leaving the market with no clear direction.
On one hand, the committee wants to raise,
but on the other hand, we have met some
targets, but not others. We have strong
jobs, but wages are not high enough; we
have a strong domestic economy, but a
weak world outlook; we have inflating ser-
vice prices, and deflating commodity prices.
The list goes on and on, and we are stuck
living the same Groundhog Day.
There are arguments by Wall Street, Main
Street, and Academia both for and against
hikes, for and against a “stay the course”
policy, and for and against easing. There is
no clear right and wrong answer; however, at least an
answer would give us direction. All the Fed did was to
wake us up again the next morning to Sonny and
Cher, “I Got You Babe.” The lack of direction from the
Fed sets up uncertainty, and what do we say about
uncertainty? That’s right, the markets hate uncertain-
ty!
The inevitable rate hike is still hanging over the stock
market, like the blizzard about to hit Punxsutawney
Pennsylvania. On the table was a wimpy quarter
point hike. A hike would have allowed the market to
move to the next stage of assessing how the global
economy will be able to adjust to the slow normaliza-
tion of Fed policy, as there are only two options in the
long run, raise rates or inflate the bubble to the point
of a burst that no monetary or fiscal policy can stop.
(continued on Page 2)
GROUNDHOG DAY
EQS recommended energy
positions have yielded a YTD
average return of 26%!
**You can achieve these
results with discipline and
by following the EQS daily
trade recommendations and
using the daily EQS Stop
Loss guidance
I N S I D E T H I S I S S U E :
Groundhog Day Cont. 2
Oil and Products 3
Natural Gas 4
About EQS 5
Terms and Disclosures 6
EQS TR A D E RE C O M M E N DA T I O N S
THE S OUR C E
F OR C OM M OD ITY
TR AD ING SIGN ALS
Volume 1, Issue 13 September, 21 2015
A Weekly Publication on the Commodity Markets
©
Commodity Symbol
Current
Position
Entry
Date
Entry
Price
Stoploss
Current
Position Return
MTD
Return
YTD
Return
Average 5-Year
Annual Return
Average 10-Year
Annual Return
Sharpe
Ratio
Max Draw
Down
WTI Crude Oil CLV15 Short 9/21/2015 44.68$ 1.75% -1.85% 12.34% 16.17% 33.71% 33.37% 2.24 -30.76%
Brent Crude Oil EBX15 Short 9/21/2015 47.47$ 1.70% -1.80% 7.29% 24.33% 27.02% 37.89% 1.01 -33.63%
Diesel HOV15 Short 9/21/2015 1.4907$ 1.60% -1.70% 4.83% 39.48% 20.91% 28.36% 1.21 -35.73%
Gasoline RBV15 Short 9/21/2015 1.3562$ 2.45% -2.55% 4.94% 41.92% 32.81% 47.05% 1.30 -33.71%
Natural Gas NGV15 Short 8/25/2015 2.801$ 1.10% 10.08% 4.86% 2.01% 61.24% 80.96% 1.48 -38.24%
This performance is simulated using corresponding stop loss recommendations. No leverage used on these results.
Refer to important disclosures on the EQS Trading (www.eqstrading.com) website.

2. Copyright © 2015 EQS Capital Management LLC, See important disclosure on last page
All rights reserved. 2 www.eqstrading.com
After the meeting, the markets proceeded to substantially delay expectations for the Fed’s first
rate hike. The market is now fully expecting the Fed’s first rate hike by the March 2016 FOMC
meeting, much later than pre-meeting expectations for the Dec 2015 meeting. The federal
funds futures market is now discounting the chances for a rate hike at only 24% at the next
FOMC meeting on Oct 27-28, 58% by the Dec 15-16 meeting, 72% by the Jan 26-27 meeting,
and 100% by the March 15-16 meeting. The odd changes have almost been Groundhog Hog
Day,
them-
selves,
as they
have
basical-
ly just
kicked
the can
down
the
road to
the
next
period.
There
will
never
be the
perfect
time to raise rates, and to the Fed’s credit, at this meeting they noted what has been on the
mind of the markets, and that is the world. We have reported in multiple issues, the world econ-
omy is not healthy. Raising rates too soon could be the straw that breaks the camel’s back, but
as academia would argue, sometimes things have to get worse before they can get better.
The economy is made of events that create business cycles and we are at the end of such a
business cycle. However, this current business cycle is different; we are in “uncharted” territory.
Typically, as a cycle starts, rates are lowered and economic output rises, rates go up and cool
the economy; the cycle ends, recession kicks in and then the cycle starts over when fiscal and
monetary policy is used to stimulate the economy to kick start growth again. The last business
cycle ended with the “Great Recession,” and this business cycle has been entirely played out
with stimulus. This cycle is different in many ways, including the importance of the globe. It is
not the duty of the FMOC to “police” the world economy; however, as the world has gotten
“smaller” what happens to the world, greatly effects the American economy. We know that the
global economy is cooling. The crashing of commodity prices is a leading indicator of recession,
the commodity market has spoken, and the business cycle is ending.
When things are great, living the same Groundhog Day time-loop is not a bad thing. The mar-
kets like “Groundhog Day” because the market has certainty about what is going to happy to-
morrow. The Groundhog Day we are living now is one of uncertainty. We know that recession is
coming or here for many economies around the world, and we know that the American business
cycle is ending. We are living a Groundhog Day of uncertainty. Actions speak louder than
words. The Fed could not even manage a baby hike. What does the Fed's stay the course action
imply about the real risks? And what success does the Fed have, other than creating a commod-
ity, equity, and junk bond bubble with their nearly eight years of stimulus in some form or anoth-
er? There are and will be pains from tightening, and there are and will be pains from doing noth-
ing. The Fed has just said it; we live in a small world. What will the Fed do if volatility goes up
instead of down? How can we manage a global economy with American domestic policy?
Phil Connors had to get the girl to fall in love with him to break the Groundhog Day loop and
make it to the next day. What is it going to take to break our economic Groundhog Day and
keep from seeing the shadow of more economic winter?
GROUNDHOG DAY…(CONTINUED)
We are living a
Groundhog Day of
uncertainty. Actions
speak louder than
words. The Fed could
not even manage a baby
hike.

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All rights reserved. 3 www.eqstrading.com
It seems like the range bound nature of natural
gas has rubbed off on oil. After last week’s bullish
call on oil, EQS has determined it made its call too
early. One key event shifted our stance to bearish
– the EIA report. You might say, “The market ral-
lied after the report so the report was bullish”.
Well, yes and no and EQS believes the market
acted prematurely and more data is needed to
fight off those bears.
Let’s first examine the psychology of the entire
week. It all started Tuesday night when the API
report at 4:30pm reported a surprise large draw in
crude inventories. After this, it appeared that the
bulls finally broke loose as prices began their
breakout of the pennant formation. Wednesday morning, the more widely watched EIA report con-
firmed the bears’ worst nightmare, as a surprise crude draw was in the cards and by the end of the
day, oil had risen nearly 10 percent from its weekly low.
However, Wednesday night,
after the big rally, EQS be-
gan peeling back the covers
on the EIA report, discovered
some troubling data, and
began questioning why pric-
es rose. Although crude
inventories showed a sur-
prise draw of 2.1 million
barrels and production de-
clined again, total crude and
product inventories rose a
massive 8.5 million barrels,
setting another new record high. Furthermore, demand, which has been fairly robust, took a notable
dive. To measure the impact of the EIA report, EQS likes to use forward days
cover by dividing total inventories by total demand. Looking at the attached
chart, you begin to see that forward days cover is above the five-year range and
rising rapidly, indicating the inventories are rising faster than the US can con-
sume and what is troubling is the exponential nature of the slope. When Thurs-
day arrived, buying enthusiasm began to fade as the market realized the EIA
report really was undoubtedly bearish and to add more uncertainty to the mix,
the Fed announced they were not raising rates and this fueled concerns regard-
ing global growth. Oil and equities then sold off on Friday and oil retraced all its
earlier gains. EQS has noted in the past few issues of Signals that oil prices are
becoming increasingly correlated with equities, and the attached chart reveals
this is indeed the case. The magnitude of the selloff of Friday, coupled with the
weakness in the EIA report, was enough to change EQS’s from bullish to bearish.
Bottom line, EQS simply cannot justify a bullish stance with inventories rising so
rapidly. Again our call to long was too soon– perhaps three weeks too soon.
However, there is still hope for the bulls to stage a comeback. Although prices
fell hard on Friday, they remained above the key support level from the pennant
formation, bounced off the PSAR technical level. If prices rebound from these
levels, it’s a possibility that our neutral bias will be short-lived. Remember, refin-
ing maintenance peaks in early October, after which inventories begin to decline
once heating season sets in. A combination of heating season, holiday travel,
and further production declines could help the bulls, once again, claim their
stomping ground.
CRUDE OIL: DOWN, DOWN,UP, UP, AND REPEAT!
Oil and Refined Products
Bottom line, EQS
cannot justify a bullish
stance with inventories
rising so rapidly...
refining maintenance
peaks in early October,
after which inventories
begin to decline once
heating season sets in.
Crude Price Pennant Formation
50
52
54
56
58
60
62
64
66
68
J
F
M
A
M
J
J
A
S
O
N
D
DaysCover
Total US Oil and Products Forward Days Cover
5-Year Range Average 5-Year 2012 2013 2014 2015
Twins?
S&P
Crude Oil
Bearish

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All rights reserved. 4 www.eqstrading.com
After beginning the week on an upward climb,
Natural Gas prices fell prey to the bears Tuesday,
as prices failed to settle above a key technical
resistance level and continued to sell off to a
three month low. Put simply, the market is trading
lower, based on concerns that oversupply will
continue as production remains strong and de-
mand fades into the fall season. Natural-gas con-
sumption typically declines in the fall, when the
weather becomes more moderate. Demand ero-
sion is indeed evident as the U.S. Energy Infor-
mation Administration reported consumption de-
creased by 5.3% overall in the week of Sept. 16,
led by a 15% decline in natural gas used for pow-
er generation.
As far as supply goes, many analysts continue to
believe record high storage at the end of the sea-
son is possible. The total working natural gas
supply currently sits at 3,334 Bcf after a 73-Bcf
injection reported by the EIA for the week of Sept.
11 that compared to a 90-Bcf injection in the cor-
responding week in 2014 and a 75-Bcf five-year
average addition. Stocks are currently 456 Bcf
higher than last year at this time and 125 Bcf
above the five-year average.
The latest weather forecast for the six- to 10-day
and eight- to 14-day periods show above-average
temperatures will overtake the majority of the
country through the end of the month and beyond
the start of the fall season. For the six- to 10-day
period, the National Oceanic and Atmospheric
Administration expects above-average tempera-
tures to span across the majority of the East,
across the central U.S., and into the West. Por-
NATURAL GAS… A WEEK OF TECHNICAL FAILURES
Bearish
Natural Gas
tions of the Southeast and an area
of the Northwest will see average
temperatures, while below-average
temperatures will be confined to a
portion of the Northwest.
The two major technical failures that
occurred this week point to lower
prices in the short term. First, natu-
ral gas failed to breach $2.80/
mmbtu, a major resistance level
shown on the attached weekly bar
chart. Then, natural price declines
continued to accelerate as they
broke through a major support price
level, confirmed with the Relative
Strength Index (RSI), the Stochastic
Oscillator, and Momentum technical
indicators. It appears that prices could be
headed toward lows that occurred in April
around $2.44/mmbtu, and EQS would not rule
out a sell off to below the psychological $2.00/
mmbtu level, although this is not our base case.
We continue to watch for an inflection point this
month before the onset of winter.
Consumption
decreased... led by a
15% decline in
natural gas used for
power generation.
NG Price Technical Failure #1
NG Price Technical Failure #2

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All rights reserved. 5 www.eqstrading.com
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
Commodi-
ty 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.

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All rights reserved. 6 www.eqstrading.com
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PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RE-
SULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESEN-
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THE SOUR C E
F OR C OM M OD ITY
TR AD ING SIGN ALS
TERMS and DISCLOSURES