Newsletter 10122015 Final Volume 1 Issue 16

Copyright © 2015 EQS Capital Management LLC, See important disclosure on last page
All rights reserved. 1 www.eqstrading.com
SIGNALS
With the third quarter behind us, now it is
time for earnings reports!
Markets are just reflections of basic eco-
nomics and technicals also play an impor-
tant role. News, systems, charts, and rules
are imbedded into
trading algorithms
and those techni-
cals move markets
and prices. The
other force that
moves markets not
only in the short
and near term but
more importantly in
the long term is
fundamentals. As
we enter Q3 earn-
ings reports, it will
be fundamentals
that will be on dis-
play and moving
the markets in the
coming weeks and
months.
Governments, cen-
tral banks, traders,
the media, and
algorithmic systems can only do so much to
move markets up and down; it is the laws
and forces of supply and demand that can-
not be broken and what ultimately move
markets. Commodities are true supply and demand
markets; producers provide supply and consumers
demand those products.
Breaking news and events provide volatility, but it is
fundamentals that drive long-term trends and in-
deed, most commodities are
in a long-term downtrend.
Short term technicals (news,
fiscal and monetary policy,
speculation, etc) have pro-
vided recent lifts to markets
and the commodity sector.
Earnings of firms will give us
the all so important funda-
mental snapshot to look at
which will provide the big
picture…Will more or less be
demanded, will more or less
be supplied, and will long-
term price trends be looking
up or looking down?
China, Japan, and Germany
have all reported falling
monthly PMI numbers, and
their weakness is weighing
on earnings of firms with
global exposure. The technicals and fundamentals of
the global economy and firms have been pumped up
by trillions of dollars (continued on Page 2)
IT’S NOW UP TO EARNINGS
-The current WTI is now up
9.81%
-Though down for the month,
the Current NG position is
now up 12.34%!
*You can achieve these results
with discipline and by follow-
ing the EQS daily trade recom-
mendations and using the
daily EQS Stop Loss guidance
I N S I D E T H I S I S S U E :
Q3 Earnings 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 16 October, 12 2015
A Weekly Publication on the Commodity Markets
©

in fiscal and monetary stimulus since the financial crisis. The disappointing US Jobs Report on
October 2nd saved the market as it was so bad it was good as traders predicted more stimulus
(and cheap interest rates) will keep business flowing.
Global data has been painting both a technical and fundamental picture that world economic
output is slowing. On October 6, 2015, the
IMF cut the global growth forecast for the
4th time in the last 4 quarters, and the
current forecast of 3.1% is the lowest
global growth rate going back to the finan-
cial crisis. Nowhere is the concept of the
global economy and growth more evident
than in declining corporate profits (see
FRED earnings graph).
While technicals can move prices, at the
end of the day technicals cannot replace
the fundamentals of global trade and prof-
its of firms. Firms can find ways to improve
earnings, but US corporate profits are basi-
cally flat and shrinking.
The markets have been extremely volatile
the last few months because uncertainty drives fear, and fear drives volatility. As firms report
earnings uncertainty will become fact, either earnings and demand was up or it was not, and
the markets can get back to trading on fundamentals.
One advantage of commodities is how easily the supply and demand equation can be calcu-
lated compared to equities and bonds. At the end of the second quarter, we asked the question,
Are Commodities Pointing to a Global Recession? Commodities tend to be a leading indicator,
falling prior to the recession. Commodities are a direct reflection of the global economy, and as
prices continue to fall, there is no surprise that the world economy is starting to cool and we
may be nearing the end of the
business cycle.
If you compare the business
profit graph to the falling com-
modity graph it paints a fairly
obviously picture, falling com-
modity prices lower firm prof-
its, and low firm profits cause
a recession.
At some point firm level, prof-
its reflect the reality and not
the indicator. Something has
to give, either firm-level profit
start catching up to market
valuations, or market valuations have to come down. Cheap commodities are good for individu-
als and firms that consume, but deflation sucks the life out of profits. Third quarter earnings will
determine if profits have caught up with valuations or it fundamentally firms are overvalued and
prices need to further correct down.
Once again, uncertainty drives fear, and fear drives volatility, but when uncertainty becomes
fact, a whole new type fear can set in. Earnings reports from Q3 will soon become fact, and third
quarter earnings will tell us if the truth is a scary place.
Q3 EARNINGS…(CONTINUED)

After EQS initiated its long call on 9/29 at
$44.43/bbl, crude oil prices remained range
bound for a week and eventually broke out to
the upside, trading above the psychological
$50/bbl, for the first time since July. The
bulls seemed to gain enough energy to leap
ahead of the bears after Baker Hughes re-
ported the last two weeks the number of rigs
drilling for oil fell sharply. The plunge in oil
prices in the past year prompted energy pro-
ducers to cut spending on new drilling, and
investors are closely watching how quickly
U.S. production will decline in response. Fur-
thermore, geopolitical concerns about Rus-
sia’s military operations in Syria also sup-
ported prices. Russia began airstrikes and
assaulted opponents of Bashar al-Assad’s
regime and the intervention added to the un-
certainty in the Middle East, one of world’s
biggest oil-producing regions.
However, the global glut of crude supplies
may keep price gains limited. This week’s EIA
report briefly took the wind out of the bulls as the U.S. inventory data showed that crude-oil supplies
rose more than expected last week, helping push total U.S. stockpiles of crude oil and petroleum prod-
ucts to another record high. The overhang in inventories has many analysts doubting any prolonged
increase in crude. Goldman Sachs is one of the outspoken oil market bears as they argued this past
week that this week’s rally is not supported by current supply-and-demand data and expect this rally
to reverse inline with our
forecast for lower prices.
EQS agrees with Goldman
in that current supply and
demand data is rather
bearish. Inventories keep
hitting all-time highs and
so this recent breakout to
the upside has many in-
vestors doubting the price
move to begin with. EQS
believes the market is not
focusing on the current
fundamental picture but
forces in action that could
shape what lies ahead for
supply and demand bal-
ance. More specifically,
traders are anticipating
the worst may be over as
refining maintenance
comes to a close and sea-
sonal demand begins to
pick back up during winter.
With rig counts continuing to come off, US production declines are expected to continue and by mid-
2016, the US could be fairly balanced. This anticipation has caused the term structure to improve
which is a bullish indication. The two remaining questions are will OPEC cut production and will global
demand for oil continue to remain stable in the midst of pending US rate hikes and China hard land-
ing? The answer to these questions could clarify whether oil will reach the $70s by mid-2016 or return
to its 2015 lows. But for now, the bulls have leaped ahead!
THE CRUDE OIL BULLS HAVE LEAPED AHEAD
Oil and Refined Products
After EQS initiated its
long call on 9/29 at
$44.43/bbl, crude oil
prices remained range
bound for a week and
eventually broke out to the
upside, trading above the
psychological $50/bbl,
Bullish

Natural gas prices are begin-
ning to firm as bottom-pickers
are anticipating the recent
historical low will be the bot-
tom. Buyers have reason to
be excited as natural-gas
prices are hovering near a
three-year low and are about
one-sixth of the record hit a
decade ago. Even when oil
prices were rebounding from
the low they hit during the
2008-2009 recession, the
North American natural-gas
market was entering a glut from which it has yet
to recover. As we have discussed in past issues of
Signals, oil, and natural gas are different in many
ways, like how they are traded internationally. Oil
products can be put into a tanker and shipped to
higher priced markets while the process is a bit
more complicated with natural gas as it needs to
be converted to LNG. Furthermore, high prices in
Asia or Europe mean little since natural gas export
capacity remains largely on the drawing board.
Another issue is that booming oil production in
shale formations also produced plenty of gas.
Drillers were willing to sell that byproduct at al-
most any price or just flare it off in many cases.
Finally, plunging rig counts, which are now at re-
cord lows, have not YET translated into lower gas
production or supply. The Energy Information Ad-
ministration reported on Thursday that gas in un-
derground storage was near a record for this date
of over 3.6 trillion cubic feet, up 14% from a year
ago. Baker Hughes said the number of rotary rigs
NAT UR A L GAS STRUGG LING TO OVERCO ME RESI STAN CE
Bearish
Natural Gas
in the U.S. devoted explicitly to
gas hit a new all-time low last
week. The productivity of existing
wells continues to be good and
efficiency has improved so that
more gas can be extracted com-
pared to rigs in service.
Although EQS remains bearish
until the downward trend in
prices is broken, our conviction is
low. After all, in October, there is
a growing risk that winter-related heating de-
mand will cause price spikes. And the bears are
beginning to get concerned because we are
approaching
winter and
prices are
becoming
too low to
go short. So
at what
price will the
trend be-
come un-
friendly?
Watch for a
settle above
$2.60/
mmbtu as
this could
be a clue
that the
Plunging rig counts,
which are now at record
lows, have not YET
translated into lower gas
production or supply.

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: JL@EQScapital.com
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able efforts to ensure that the information is accurate and up to date, no representations or war-
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This material has been compiled and presented as general information, without specific regard
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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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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
THE SOUR C E
F OR C OM M OD ITY
TR AD ING SIGN ALS
TERMS and DISCLOSURES

Newsletter 10122015 Final Volume 1 Issue 16

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Newsletter 10122015 Final Volume 1 Issue 16