Newsletter 08302016 Final Volume 2 Issue 6

Copyright © 2016 EQS Capital Management LLC, See important disclosure on last page

All rights reserved. 1 www.eqstrading.com

SIGNALS

The United States rally in the stock mar-

ket continues to build steam as Wall

Street hovers around the all-time high

levels that were achieved this summer.

As the Presidential election heats up,

with one camp telling the American peo-

ple how great things are, and the other

painting a picture of working class

struggles, what is

the real story?

As we have said

before, uncer-

tainty drives fear,

which drives vol-

atility. Brexit is

over, and the

world survived

(though there

has yet to be an

actual exit of the

EU). As Brexit

fears fizzled and

a successful Olympics keeping the Bra-

zilian economy in check, the global eco-

nomic Armageddon has not come this

summer and things have started to look

a little better for the world.

The United States has had the luxury of

being a safe haven in this very shaking

and uncertain world economy, but this

could be reversing. As traders buy the rumors

and sell the news, it is the United States with

markets near all-time highs, a FED that is yet to

make a non-illusive statement, and a heavily

divided Presidential race that becomes the

place of uncertainty.

Things are not

bad, but they

are not good

either. It is a

fact that

stocks have

inched to all-

time highs. It

is also a fact

that US

stocks are

priced in dol-

lars, and the

dollar has slipped this year. In real dollar terms

investors are getting “less bang for the buck”

when shopping for stocks. The dollar is about

2.5% lower in August than it was in July, and is

down about 5% for the year. With the S&P up

about 6% on the year and the dollar down 5%, it

is not hard to figure out that the American econ-

omy has not really gone much of anywhere this

this year…

ALL IS CALM

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

All is Calm Continued 2

Precious Metals 3

Crude Oil 4

Natural Gas 5

Cattle 6

About EQS 7

Terms and Disclosures 8

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 OU RC E

F O R C O MMOD ITY

T RA DING S IG NA LS

Volume 2, Issue 6 August 30, 2016

An EQS Publication on the Commodity Markets

©

Commodity SymbolCurrent

PositionStoploss YTD Return

Average 5-Year

Annual Return

Average 10-Year

Annual Return

Sharpe

Ratio

WTI Crude Oil CLV16 Neutral NA -5.33% 44.71% 48.20% 2.87

Brent Crude Oil EBX16 Neutral NA 21.37% 51.16% 51.90% 1.39

Diesel HOV16 Neutral NA 21.16% 33.36% 37.98% 1.73

Gasoline RBV16 Neutral NA 23.33% 43.13% 51.81% 2.97

Natural Gas NGV16 Long 3.05% 48.33% 55.95% 66.84% 1.44

Gold GCZ16 Long 1.20% 3.77% 10.88% 20.76% 1.54

Silver SIZ16 Short 1.70% 9.27% 53.45% 64.45% 1.23

Live Cattle LCV16 Long 1.35% -9.74% 14.13% 15.78% 1.25

Average Portfolio 14.02% 38.35% 44.72% 1.80

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.



A weak dollar causes problems, and a strong dollar causes a different set of problems. So what

does this mean? Well, it depends on who you are! Are you an importer, or an exporter? Are you

a consumer or a producer? A saver or a spender? Business owner or laborer? This is where the

real story gets tricky…what are Janet Yellen and the FED going to do?

There is no question that segments of the economy are about to get a heat stroke, and no ques-

tion that there are segments fighting hyperthermia. As the economy reaches the

FED’s target employment and inflation targets, and with a looming Presidential

election, can Yellen really hike rates?

Based on “facts” the FED should hike another 25 bps before the November elec-

tions. Based on uncertainty not only should the FED leave rates unchanged, they

should consider a cut back to zero or go negative. The question is what are the

real “facts?” Are

you confused?

Confusion is un-

certainty, and

what is uncertainty?

It has been refreshing to have a

“calm” summer, however nothing

has really changed, “facts” are

still “facts,” and it is a fact that

nobody really knows what is going

to happen. Enjoy the record

highs on Wall Street, because a

penny saved is not a dollar

earned when unknown forces

intervene and create a little thing

called uncertainty.

AL L I S CA LM (C O NT I N U E D )

Based on “facts” the FED should hike another 25 bps before the

November elections.



PR E C I O U S M E TA L S MA R K E T SU M M A RY

Gold-backed ETFs had the highest

inflows on record during the first half

of the year.



CRU D E O I L MA R K E T S U M M A RY

Economic growth has supported the

demand outlook for oil, however, this growth has not been enough to

reduce the storage overhang.



NAT U R AL GAS M AR KE T SU MM A RY

The July ISM signaled economic activity expanded

for the fifth consecutive month, causing natural gas industrial demand

to rebound.

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

30.00

35.00

40.00

45.00

50.00

55.00

60.00

65.00

Jan-

2003

Jul-2

003

Jan-

2004

Jul-2

004

Jan-

2005

Jul-2

005

Jan-

2006

Jul-2

006

Jan-

2007

Jul-2

007

Jan-

2008

Jul-2

008

Jan-

2009

Jul-2

009

Jan-

2010

Jul-2

010

Jan-

2011

Jul-2

011

Jan-

2012

Jul-2

012

Jan-

2013

Jul-2

013

Jan-

2014

Jul-2

014

Jan-

2015

Jul-2

015

Jan-

2016

Jul-2

016

ISM 3M Advance

Natural Gas Industrial Demand (YOY 3mma)

Natural Gas Industrial Demand



CATT LE M AR K ET SU M M ARY

The cattle supply & demand balance

which was in surplus last year has shifted into

deficit.

500

520

540

560

580

600

620

640

660

680

700

Pou

nd

s (T

ho

usa

nd

s)

Beef in Cold Storage

10-year average 2016

(0.30)

(0.20)

(0.10)

-

0.10

0.20

0.30

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

Bel

ow

0 =

Sh

ort

age,

Ab

ove

0 =

Su

rplu

s

Cen

ts p

er P

ou

nd

Cattle Supply and Demand Balance

Supply/Demand Balance

Futures Price



Services

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 insti-

tutions. Because EQS uses a “long” and “short” strategy, it is designed

to generate returns, regardless of which way the market is moving. EQS

Commodity Fund imbeds strict risk management principles through diver-

sifying its

portfolio

(energy,

metals,

and agri-

culture)

and ac-

tively

managing

stop loss

limits.

About EQS

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

strategy that translates economic data and technical indicators into price

direction for commodities. Because of its quantitative nature, EQS has

been rigorously back-tested with 15 years of historical data to ensure the

strategy

works in a

variety of

market

conditions.

Further-

more, be-

cause the

global

economy

changes

over time,

EQS em-

ploys dy-

namic parameters that evolve as the market changes.

About Us

Management

Richard C. Rhodes

Mr. Richard C. Rhodes is the Presi-

dent 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 pro-

ducer to end-user. Richard is a licensed 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 Exploration 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 mid-

stream, refining, pipeline, and distribution operations. During his eight

years with Koch Industries, Richard began as an operations engineer

and later found his true passion in trading, which leveraged his pro-

fessional 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 degrees in Risk Man-

agement, Insurance, and Economics, and

started working on his PhD in Economics at

North Carolina State University before focus-

ing 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 intend-ed as, nor should it be construed to be, investment advice. In no event will EQS, its affiliates, 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 Subscrip-tion or the failure of performance, error, omission, interruption, delay in operation or transmis-sion. 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 PRIVATE PLACEMENT MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-FENSE.

T H E S OU RC E

F O R C O MMOD ITY

T RA DING S IG NA LS

TERMS and DISCLOSURES

Newsletter 08302016 Final Volume 2 Issue 6

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