Well, it is possible to dig out of a big hole.

Bernanke Outlines 'Case for Further Action' to Spur Economy Forward.

Fed Chair Ben Bernanke has some ideas about pumping more money into the flagging recovery to get us out of a different kind of hole.  In talks last week, he clearly presents the case for more action.

• He predicts a weak recovery and continued high unemployment.
• Bernanke talks about a mandate-consistent 2% inflation rate — further emphasizing this idea that the Fed will aggressively target positive inflation.

You can read Bernanke's whole speech here.

According to the WSJ, the Fed sent an even clearer message in its written remarks.  How? Bernanke used italics only four times in the report.  Do those four instances constitute a 'font of wisdom' message from the Fed chairman. Let's look at the message.

First, Mr. Bernanke said the Fed takes its cues from two primary objectives: the "longer-run sustainable rate of unemployment" and the "mandate-consistent inflation rate." He later made clear what the Fed thinks about both right now: Inflation is "too low" and unemployment "too high."

Market Commentary

Even though stocks are overextended after a seven week run, I have not yet seen compelling evidence of weakness that would signal the start of a correction or pullback.

Nonetheless, I'm watching a few things closely.  For example, we are seeing some negative divergences in the banking and financial sectors.  They have not enjoyed the same success as the rest of the market over the last several weeks, and this may be telling us something.

On the other hand, the Nasdaq 100 Index (comprised of the large capitalization tech stocks) is leading the move higher. The recent strength in this index not only made a new 52-week high last week, it also hit levels not seen since late 2007.  Should the S&P 500 Index follow this leader, the short-term future looks good.