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Market Preview: QE3 Overload

NEW YORK ( TheStreet) -- Feel like some of the shine is wearing off QE3? John Stoltzfus, chief market strategist at Oppenheimer & Co., agrees.

"Six trading days after Fed Chair Bernanke & Co. launched the latest chapter of quantitative easing, investors who were looking for a party have instead received a near round trip ticket back to day one," he wrote in commentary released Monday. "Some who were nearly dancin' in the streets at the announcement, are now working hard at maligning the raison d'etre behind the launch and even projecting that the end result of QE3 will likely detract from, rather than add to, the process of economic recovery. Since the market first celebrated the arrival of QE3 last Thursday closing up 1.63% on the day, enthusiasm has indeed ebbed."

It's true. Aside from that initial burst, which to be fair was quite a leap, the major U.S. equity average haven't done much. And slowly but surely, market watchers are wondering if we've already seen the best that 2012 has to offer.

Stoltzfus thinks there's more upside ahead for stocks, though he believes it will be closer to the 10%-plus gain in the S&P 500 during QE2 than the 36%-plus surge that accompanied QE1. He thinks the index will move "above and beyond" 1500 "before -- but not necessarily at -- year's end."

"We expect the effect of QE3 will be net positive for the economy and the markets during its tenure," he said. "Though likely not influencing such dramatic upside in asset class performance as QE1 launched in the depths of the financial crisis, the overall effect could well equal or rival the effect of QE2---boosting performance midst asset classes and elevating sentiment to good degree on Main Street."

Deutsche Bank, meantime, thinks the affinity that investors have exhibited for stocks so far in 2012 is about to be tried by a lackluster third-quarter earnings season.

"Although ECB and Fed actions have reduced tail risks, global growth, especially manufacturing and Asia construction have yet to show signs of an upturn," the firm said. "3Q is expected to be the first quarter of y/y EPS decline since the recession ended. The elections will influence whether fiscal policy adopts a stance as pro-growth as monetary policy. In our view, the period between now and elections will be a true test of market risk appetite."

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