1

SIGNALS

Econ 101…When supply

equals demand we get Equi-

librium. It has been a wild

few weeks for all commodities

as supply and demand are

locked in a death battle to

find price stability. When this

happens it is a fun time to be

a commodity trader as volatili-

ty leaves profit opportunity.

Across the board the markets

have been getting swung daily

as news stories from Greece,

Europe, Puerto Rico, and Chi-

na have been yo-yoing mar-

kets as fast as the news de-

velops. If you trade equities,

news moving prices is nothing

new, but the difference is that

these global stories are

changing the macroeconomic

picture for the entire world

which is creating DEMAND

side uncertainty, and thus

price uncertainty.

No picture is stronger than

the swing in the industrial

metals, which is directly corre-

lated to the global picture for

building and manufacturing.

Iron prices have been down

as much as 28% this week!

On Wednesday alone iron ore

fell more than 10%, the larg-

est one-day percentage fall on

record-EVER!

The reason we have been

focused on China is that they

are the Elephant in the room,

with 15% of the entire global

GDP. If the Chinese equity

market collapses it could

trigger a chain of events that

will do what? Change global

DEMAND for commodities

such as energy, metal, and

food. Well to all of my fellow

readers that passed Econ

101, a change in DEMAND chang-

es the one thing we care about…

PRICES!

The Chinese government has

been scrambling to keep their

markets propped up for many

reasons, one of the biggest being

if the market crashes it is as the

social unrest issues that will be

as big or bigger issue for the

country than the economic prob-

lem that a crash will cause. So-

cial unrest could be the straw that

breaks the back of the Com-

munist Party, so the government

is literally fighting for its life!

(continued on page 2)

GL O BAL NEW S RO CK S WOR L D SU PP LY A ND DEMAN D OU TLO OK

Some Good Runs This Week!

As we always say...volatility is our Friend!

-Gasoline was up 6.77% since our long call on 7-7-15

-The total gain on the long posi-tion for oil and all products since the long call on 7-7-15 was 4.12%

**You can achieve these results with discipline and by following the EQS daily trade recommenda-tions and using the daily EQS stop loss guidance

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

World Continued 2

Natural Gas 3

Oil and Products 4

Terms and Disclosures 5

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 3 July 13, 2015

A Weekly Publication on the Commodity Markets

TM

2

(Continued from page 1)

Here is the problem; the Chi-

nese government is kicking

the can down the road by

saving the market. As the

market is not allowed to

properly correct the bubble is

only growing bigger, and as

we well know the bigger the

bubble the harder it pops.

Expect the China market to

stabilize a bit with the govern-

ment intervention this week.

The Chinese news stories will

likely start to fade away, and

that is when we need to start

being concerned, recall that

we at EQS started talking

about China long before the

media picked it up. Just be-

cause the media stops talking

about it will not make it go

away, so will continue to keep

you posted on developing

events.

What makes the commodity

market more fun than other

markets is we also get the

pleasure of dealing with SUP-

PLY uncertainty. This week

we have bearish EIA reports

across the board as there

appears to be a domestic glut

in most of the energy sector.

Iran talks continue and

Obama put the likelihood of a

deal at 50/50 as delays still

preside. If sanctions are lifted

it will put Iran light sweet

crude on the market, which

could further glut the market

and would be bearish on pric-

es.

The domestic agriculture sup-

ply has also been getting

hammered this week as

weather is taking a toll on

crops. Drought in the west

and heavy rain in the central

mid-west are rallying ag pric-

es. We will continue to keep

our eyes on the radar, but it

looks like much of the dam-

age may already have hit the

growing season to rescue

yields.

As we said on Friday, you

cannot be on the right side

of the market every day, but

over the long run by staying

disciplined and cutting loss-

es with stops and letting your

winners run you can enjoy

the returns that the EQS

strategy provides.

WO R LD….(C O N T . )

On Wednesday alone

iron ore fell more than

10%, the largest one-

day percentage fall on

record-EVER!

3

Despite the recent rally in prices, EQS re-

mains Bearish on natural gas prices as it

still has not broken out of the long-term

resistance line that has been holding since

February of 2014.

No extreme heat is expected this month, "today's forecast is a bit warmer than yes-terday's" in the next 11 to 15 days, said pri-vate forecaster WSI Corp. in a note.

Robust production has kept prices subdued this summer. The U.S. Energy Information Administration reported on Thursday that natural-gas inventories grew by 91 billion cubic feet last week, more than analysts and traders had expected. Gas stockpiles now sit at 2.7 trillion cubic feet, 33% more than a year ago and 1.7% above the five-year average. "The demand necessary for any sustained rally just isn't there," said Aaron Calder, analyst at Gelber & Associates, in a note.

Despite Rally, No Fundamental Changes

Bearish

4

Money managers cut their bet on rising oil prices to their lowest point since March in the week ended Tuesday as prices hit multi-month lows. CFTC data show hedge funds and others had cut a net 4,826 bets on rising Nymex crude prices and added a net 37,559 bets on falling prices compared to a week before. Net long shrunk 20% to 174K. Prices fell 12% in the last week about uncertainty about the Greek crisis, Chinese equity markets and the Iran nuclear negotiations. U.S. oil futures posted their biggest weekly decline since March amid concerns about a continued over-supply of crude oil and potential weaker demand from the eurozone and China. On Friday, the International Energy Agency said the market would remain oversupplied in 2016 and warned that prices could have further to fall. Oilfield-services firm Baker Hughes Inc. said the number of rigs drilling for oil in the U.S. rose this week for the second straight week, fueling concerns that oil pro-duction in the U.S. could stay robust. The IEA on Friday said global demand for oil would slow down next year, as it warned that crude prices could resume a recent downward spiral. In its first forecast for next year, the IEA, which advises industri-alized nations on their energy policies, said global oil-demand growth is forecast to slow to 1.2 million barrels a day in 2016. That compares with an average of 1.4 million barrels a day this year. Before the bearish news rolled the EQS position, our subscribers has a nice run since our long call of oil and the products on 7-7-15. The big winner was gasoline, which settled up 6.77% since the recommen-dation was made. The average of the long call for WTI, brent, diesel, and gasoline was up a nice 4.12%, not too bad for 4 days work!

O I L & PRO D U C T S . . . SO LO N G T O GO I N G LO N G . . .TH E SHORT I S O N !

Bearish

5

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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