newsletter 05192016 final volume 2 issue 4

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

All rights reserved. 1 www.eqstrading.com

SIGNALS

Markets have been historically irrational, so

it only makes sense that they continue to be

irrational! What is good is bad, and what is

bad is good. There are many drivers across

the markets, and as the bulls and bears

fight over market direction, little has

changed to start the second quarter as mar-

ket volatility as tracked by the VIX remains

at or below typical levels.

The major cata-

lyst of the mar-

kets has been

the strength of

the commodity

sector, which

has been large-

ly dominated by

global forces

(namely China

and India), with

American job

numbers set-

ting the prece-

dent for American interest rate expectations

and thus setting the tone for the global mar-

ket. The markets are also waking up to the

looming national American elections this

Fall, as the outcome will likely have myriad

implications on not only the current policy,

but through Supreme Court nominations-the

policies of generations to come.

The economy continues to add jobs and is attempting

to reach and surpass many pre-recession measures;

major US equity indexes are at or near all-time highs,

as the unemployment rate hovers around 5%. As

inflation is still flat relative with the Fed’s target, the

rally in commodity prices, the recovery of oil prices

and the Non-Farm Payroll numbers become critical

measurements of the economic pulse of America.

Job creation re-

mains strong, but

with 160,000 jobs

added juxtaposed

with the 202,000

expected, the

market reacted

with the rational of

slowed growth, but

the pause eventu-

ally dissipated as

the bulls made the

case that another

Fed rate hike will

be delayed. With

the seemingly tenuous jobs report, economists-

including those at Barclays and Merrill Lynch-have

revised their rate hike expectations from two, down

to one, which is largely anticipated by the market to

occur in September. When you peel back, unearth

the headline numbers and look at the quality of jobs

that have been created in America since the Great

Recession, they still leave much to be desired.

JO B S M I S S , A N D T H E M A R K E T S SH RU G I T O F F…

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

Job Miss Continued 2

Precious Metals 3

Crude Oil 4

Natural Gas 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 4 May 19, 2016

An EQS Publication on the Commodity Markets

©

Current crude oil long rec-ommendations for WTI and Brent are up 30% and 40%, respectively.

*You can achieve these results with discipline and by following the EQS daily trade recommendations and using the daily EQS Stop Loss guidance

Commodity SymbolCurrent

PositionEntry Date Entry Price Stoploss

Current Position

ReturnMTD Return YTD Return

Average 10-Year

Annual Return

Sharpe

Ratio

WTI Crude Oil CLM16 Long 2/22/2016 29.64$ 2.00% 29.91% 5.89% 35.22% 35.40% 1.49

Brent Crude Oil EBN16 Long 1/28/2016 33.10$ 2.00% 40.08% 5.65% 50.13% 43.76% 1.00

Diesel HOM16 Long 2/18/2016 1.0879$ 2.00% 17.73% 6.96% 28.94% 34.15% 1.59

Gasoline RBM16 Long 2/23/2016 1.0006$ 2.00% 11.79% 3.96% 17.85% 49.32% 0.94

Natural Gas NGM16 Long 5/19/2016 2.001$ 2.50% 0.00% 1.42% 0.05% 70.93% 1.48

Gold GCM16 Short 4/5/2016 1,219.30$ 1.00% -6.30% -0.88% 3.32% 31.87% 2.06

Silver SIN16 Short 5/18/2016 17.36$ 1.75% -1.75% -5.35% -11.80% 67.98% 0.98

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.



The trend in total compensation, a number which takes into account hours worked, salaries paid and bene-

fits, is actually declining, and as individuals drop out of the labor pool in frustration, the headline numbers

are skewed. Americans are simply leaving the labor force in large numbers, much of it to retirement and

parenting, but it is important to point out that many Americans who have the ability to leave the labor force

find that salaries and small business earnings are too low to make it worthwhile for them to stay in the labor

market.

Total annual compensation

of workers has dropped by

15% of the American GDP

($3 trillion) since 1970 and

workers of the world have

failed to unite to reverse

the trend, as the old adage

of “the rich get richer,

while the poor get poorer”

continues.

While the work force con-

tinues to be underem-

ployed and underutilized,

lower real term wages of

workers benefit corporate

earnings. With booming

growth in the construction and service sectors, it would be rational to extrapolate that corporate earnings

show healthily growth. As pointed out earlier, markets are not rational, and earnings from publicly traded

companies have failed to impress Wall Street. The irrational markets continue to react to headlines, and

have largely shrugged off the underlying message that contributes to those headlines.

Several sectors and companies have been winners, but some “blue chip” companies have had some set-

backs, which could be a canary in the coal mine for the epic 2016 rally in equity and commodities. Disney

and Apple are two American giants that have had recent reversals as quarterly earnings and guidance have

disappointed investors. One of the major themes

continues to be global struggles, as both companies

point to weakness in China. However, optimism

persists that American markets can overcome a

global slowdown, as rebounding oil prices give hope

that cause for a global recession is diminishing.

With negative rates, many central banks around the

world are doing everything possible to pump money

into the economy and spur growth. Even if the US

hike rates one to two times in 2016, hitherto-rates

are still historically and empirically low. By some

measures, many of the fiscal and monetary policies

are working as the world has not slipped into a re-

cession. We keep a close eye on Brazil and Britain,

as political uncertainty could create outcomes that

either strengthen or weaken the world economy.

With uncertainty, we remain flexible and hope for

the best, but prepare for the worst.

As we march towards summer, the markets appear to be gaining momentum and are relatively healthy.

Don’t fall victim to market and media hype, peel back the onion and take a hard look at the real story that

the market and numbers that drive the market are saliently conveying. Good times appear to be here, but

the question remains, are they?

JOB M I SS (CO N TI NU E D )

Total annual compensation of

workers has dropped by 15% of the American GDP ($3 trillion) since

1970 .



Diverging viewpoints are surfacing regarding the direction of precious metals prices from some

well-known market players and although gold has had a stellar performance in January, it has

been fairly range bound since then between $1200 and $1300 per troy ounce.

Warren Buffett’s famous quote on gold seems

to best capture its behavior: “Gold isn’t produc-

tive and only rises when investors believe the

ranks of the fearful will grow.” Supporting the

bullish view are George Soros, Stanley Drucken-

miller, Paul Singer, and JP Morgan. George

Soros is famous for his trade of the century

when he made over a billion dollars during the

early 1990’s by betting against the pound and

bringing the Bank of England to its knees. So-

ros recently disclosed that in the first quarter

he doubled the amount of put options on the

SPDR S&P 500 ETF and acquired a large stake

in gold. Druckenmiller, hedge fund manager

and former portfolio manager for Soros is also

bearish on stocks but very bullish on gold. Sing-

er, who runs hedge fund Elliott Management,

wrote in a note to clients: “This is just the begin-

ning of the rebound in gold.” JPMorgan has

recommended to clients to own gold on the

view that Fed tightening could tip the fragile US

economy into recession during 2017 and gold has historically performed well during recessions.

Taking a less optimistic view on gold is John Paulson, BlackRock, First Eagle Investment Manage-

ment, and Goldman Sachs. John Paulson, who runs Paulson & Co. became known to have made

one of the greatest trades ever when he made billions by betting against the real-estate bubble

during the subprime fallout and financial crisis. Paulson has been one of the world’s most influ-

ential gold investors as he earned $5 billion on the metal in 2010. However, he recently cut his

exposure by 17% as he believes prices have little room to run as the Fed prepares to hike rates

this year. Also supporting Paulson’s view is BlackRock and First Eagle Investment Management.

Goldman Sachs is recommending to short gold and has publically stated it’s their highest convic-

tion trade. Goldman sees a number of catalysts moving prices lower, including a more hawkish

Fed and ultimately U.S. policy rate divergence, corresponding with gradual dollar appreciation

over the next 3-12 months. Goldman expects a rate hike in September and believes that July is

also a possibility, which is bullish for the US dollar and bearish for gold.

EQS believes precious metals are becoming dull and we are bear-

ish on both gold and silver and support the latter argument

above. Mining companies are recommended to hedge at these

levels. While the current dovish Fed and low interest rate envi-

ronment is supportive for both silver and gold, the economy is

growing, albeit anemic, and this is enough to tip the scales down

for both metals. Our bearish call was confirmed when both met-

als failed key technical levels after the Fed minutes indicated a

June hike in interest rates is likely. Silver formed the reversal

head and shoulders pattern and failed the neckline support level

and gold failed its short-term support level. If you are an investor

with significant long exposure to equities, then a small long allo-

cation to gold makes sense as a hedge to diversify your portfolio.

However, on a stand-alone basis, the current economic environ-

ment does not support or sustain long positions in either metal.

P R E C I O U S M E T A L S P R I C E S - - B E C O M I N G D U L L

Our bearish call was confirmed

when both metals failed key technical levels after the Fed minutes indicated

a June hike in interest rates is

likely.

Silver Head & Shoulders Pattern

Gold Support Line Failure

Bearish

Head

Shoulder Shoulder

Neckline



Saudi Arabia, historically, has been at the forefront when it

comes to crude oil as they are the world’s largest producer, the

lowest cost producer along with Iran, and holds virtually all the

spare capacity available in the market. Due to the collapse of

oil prices, the Saudi economy has suffered and the young Saudi

Deputy Crown Prince Mohammed bin Salman (MBS) has a new

vision (i.e. Vision 2030), which is aimed to diversify the Saudi

economy by using oil revenues to build the world’s largest sov-

ereign wealth fund as the investment engine for development.

MBS came to power as the son of King Salman and the grand-

son of the country’s founder, Abdulaziz Ibn Saud. The young

prince recently flexed his muscles and omnipotence by ousting

the long-time oil minister Ali al-Naimi and

replacing him with Khalid al-Falih, the chair-

man of Saudi Aramco. Some analysts view

this move by MBS as an effort to save face

after the disastrous Doha meeting (for more

on Doha, see last month’s Signals). On the

one hand, the shift to a new oil minister sets

the stage for a more productive OPEC meet-

ing in June with greater hopes for a produc-

tion deal. On the other hand, al-Falih is con-

sidered to be in Salman’s inner circle and

expectations are that the Saudi’s are sup-

portive of maintaining high production levels

and letting low prices do the job of gradually

rebalancing the markets.

O I L PR I C E S - -A NE W SH E R R I F I N SAU D I AR A B I A

The young Deputy Crown Prince Mohammed bin Salman is the son of King Salman and the grandson of the country’s founder, Abdulaziz Ibn Saud.

Bullish

Bullish Factors Dominate

Saudi Arabia’s government budget

balance as a percentage of GDP vs

Brent Oil Prices ($/bbl)



Although the unfolding political shifts in Saudi Arabia could be viewed as market neutral

for oil prices, there are two key indicators which are indeed bullish and have been driv-

ing prices upward as of late; they are unplanned produc-

tion outages occurring

around the globe and the

rate of decline of US shale

production. After the

market rapidly declined

6.5% following the fallout

at the Doha meeting, oil

workers in Kuwait went on

strike, taking a massive

amount of oil production

offline. This event limited

the downside of oil prices

following Doha, which EQS

believes could have been

on the order of a 10-15% slide in prices. The Kuwait Oil Company workers’ strike lasted

only four days, but output at its oil fields was reduced by as much as 60% during the

strike. In whole, OPEC unplanned supply disruptions averaged almost 2.5 mbpd in April,

up from March. The

Alberta wildfires are

also having a major

impact on supply.

Market reports indi-

cated that approxi-

mately 1.1mbpd of

production came

offline and while this

is substantial, crude

oil inventories at

Cushing are at rec-

ord levels, so the

impact to prices has

only been moderate.

Moreover, in Nigeria,

output has fallen to its lowest in decades following several acts of sabotage. Finally, US

production continues to contract year-on-year and this amalgamation collated with in-

creased unplanned outages has supported prices during the past month.

Although EQS announced its long call on WTI

back in February when WTI was just under $30

per barrel, headwinds could stall the rally for

the black gold; a major caveat is crude prices

are now at levels that allow many US shale

plays to break even and become profitable.

With the WTI 2017 calendar strip currently trad-

ing over $50/bbl, producers are increasing their

hedge portfolio exposure with heavy selling on

the forward calendar months. Despite this, EQS

feels that as long as the global economy re-

mains stable, crude prices will follow an auspi-

cious, upward trajectory and with the summer

and travel season approaching, inventories will

face substantial draws which should support

prices during the next few months.

O I L PR I C E S - -A NE W SH E R R I F I N SAU D I AR A B I A

Although EQS announced its long call on WTI back in February when WTI was just under $30

per barrel, headwinds could

stall the rally for the black gold...

Cash cost of onshore oil

production ($ per barrel of

oil equivalent)

Breakeven oil price at well-

head for US Shale Produc-

ers ($ per barrel)



EQS mentioned in last month’s publication how

it’s been predominantly bearish since June 2014.

We are getting excited about natural gas and feel

that some conducive warm weather will charge up

the bulls. EQS is now bullish on natural gas and

feel once the summer heat arrives-prices could

rise substantially. But this is not a typical summer

for natural gas; it’s different this time. Here is

why…

Our thesis is mainly driven by the economic con-

cept of substitution. By academic definition, sub-

stitutes are when two goods can be used for the

same purpose. Let’s say apples and pears are

substitutes and let’s assume I like to eat both

apples and pears, but the price of apples is exor-

bitant relative to pears. Well, then I may choose

to only buy pears until the price of apples falls

back to comparable levels. Put another way, if the

price for apples goes up, the demand for pears

will go up.

The same is true in choosing a fuel for power gen-

eration. Natural gas is tantamount in importance

as a fuel source to power generation as gasoline

is to cars. Power generation plants use different

types of fuels, from nuclear to solar to fossil fuels.

Among the fossil fuels are heating oil, residual

fuel oil, coal, and natural gas. As seen from the

graph, natural gas is currently far cheaper than

the other substitute fossil fuels and typically when

this happens, the demand for natural gas picks up

and prices rise accordingly. Natural gas is not

only the cheapest fossil fuel right now for power

generation, but it’s also the cleanest for the envi-

ronment. Consequently, there is a big push to

move the power generation fleet to natural gas. As

NATU R A L GA S PR IC E S - - IT ’S D IF F E R E N T T H IS T I M E

EQS mentioned in last month’s publication,

power demand was boosted as coal-to-gas

switching due to cheap natural gas prices accel-

erated in March when Henry Hub cash prices

retreated to lows of $1.50/

MMBtu. Secondly, coal and No.

6 oil retirements due to environ-

mental standards have and will

continue to boost demand as a

total of 55 GW of power genera-

tion capacity is scheduled to

come online in 2016, with 24%

of the new additions dedicated

to natural gas.

There is further good news for

natural gas. The ISM manufac-

turing index has rebounded

since the beginning of the year

and this is a reliable forward

indicator of natural gas industri-

al demand. As the attached

graph reveals, the ISM has re-

bounded from a soft patch during Q1 and there-

fore industrial natural gas demand is expected

to rise during the upcoming EIA reports.

If you are a large investor or consumer of natu-

ral gas in the power generation or refining sec-

tor where natural gas is used as feedstock, look

for buying opportunities now during periods of

abject weakness. EQS recommends to NOT buy

all your natural gas contracts all at once, but

spread out (or average) your buying over the

next week or until the weather forecast indi-

cates heat on the horizon. Traders are recom-

mended to go long and follow our daily signal

subscription service for updates.

Natural gas is not only the cheapest

fossil fuel right now for power

generation, but it’s also the cleanest for

the environment.

-

5

10

15

20

25

30

35

$ p

er

MM

BTU

Power Generation Fuels

Heating Oil Residual Fuel Oil Coal Natural Gas

-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

-20

03

Jul-

20

03

Jan

-20

04

Jul-

20

04

Jan

-20

05

Jul-

20

05

Jan

-20

06

Jul-

20

06

Jan

-20

07

Jul-

20

07

Jan

-20

08

Jul-

20

08

Jan

-20

09

Jul-

20

09

Jan

-20

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Jul-

20

10

Jan

-20

11

Jul-

20

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-20

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Jul-

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-20

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Jul-

20

16

ISM 3M Advance

Industrial Demand (YOY 3mma)

Fossil Fuels Consumed for Power Generation

ISM Index Foreshadows NG Industrial Demand

Bullish

Bullish Factors Dominate



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 05192016 final volume 2 issue 4

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