QE3 Pros, Cons and Stock Watch: Chris Ciovacco Sounds Off

by: David Oldenburg

Over the weekend on the Online Money Show, a radio show featuring Seeking Alpha contributors and their views on key stocks and market events, I interviewed Chris Ciovacco about QE3, the stocks and ETFs most likely to benefit from QE3, the likelihood of QE3 happening soon and the basics behind QE (Quantitative Easing) in general. I found Chris to be an excellent interview, with a great knowledge of the pros and cons of QE. I also thought his research into the 10 most likely stocks and ETFs to play with a QE3 announcement to be excellent.

Chris did confirm that he believes a QE3-type event is unlikely. However, he spoke about the signs to look for to get an idea if a QE3 announcement might be imminent. We could have talked for hours on this timely topic but the entire interview has been editing down to under 20 minutes and is well worth a listen. You can listen by clicking the play button below. I have also included the stocks and ETFs mentioned in the show below:

As a stock and options trader, I spent some time going over the stocks and ETFs that Chris recommends should QE3 be announced. I am including a list here for those who want to begin following and watching these stocks and ETFs. I caution investors because Chris and I believe that while a Q3-type event is possible, it is unlikely that it will be the easy money that was fueled by QE2.

The much more likely scenario is that the market will be much more choppy during QE3. Simply buying and holding and hoping to take an elevator ride to the top may result in an investor getting burned. For this reason, investors and traders will need to be far more aware of what is happening with their investment choices, watching them very closely. Of course, it is this possible volatility that will permit real money to be made for those who know how to trade it.

Below is the table of stocks and ETFs that Chris discusses in relation to QE3. Tune in to learn more about these names.

Ticker Name Ticker Name
SLV iShares Silver Trust XLE Energy Select Sector SPDR
IEZ iShares Dow Jones US Oil Equipment Index KOL Market Vectors Coal ETF
SLB Schlumberger Limited JOYG Joy Global Inc.
OIH Oil Services HOLDRs XME SPDR S&P Metals & Mining
HAL Halliburton Company NEM Newmont Mining Corp.
XES SPDR S&P Oil & Gas Equipment & Services FCG First Trust ISE-Revere Natural
NE Noble Corp. XOM Exxon Mobil Corp.
UNG United States Natural Gas PXD Pioneer Natural Resources
XOP SPDR S&P Oil & Gas Exploration & Prod
SUN Sunoco Inc.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.