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The rate hike cycle is now officially over.

That's what I got out of Ben Bernanke's commentary to the Washington Economic Club.

I was out of pocket/away from the flickering ticks all day yesterday, but reading the reports on why the Fed Chair's comments launched the markets higher has been an exercise in futility. The short version is simply the Fed Chair sees the economy slowing significantly enough that the Fed is officially out of the way. His highlighting that the sinking housing markets may put a significant dent in U.S. economic growth in the second half of the year moves the Fed to the sideline.

That strengthens the hope of the rare and mythical soft landing; Color me skeptical.

From a macro perspective, Housing's slide is real and ongoing, retail has become a mixed bag, savings is non-existent, and the industrials are peaking. That is being offset -- but only somewhat -- by moderating inflation and falling energy prices, now off some 20% from their peaks.

Reviewing yesterday's market internals, we did see breadth improve significantly; volume also was better than it has been. Marketbeat ticked off what the usual suspects are that must be overcome for this to be sustainable:

"the yield curve is still inverted, the Dow Transports haven't "confirmed" the move, the Russell 2000 has diverged from the Dow, many indices are showing a "double-top" -- and of course, the old standby, that the Dow doesn't matter anyway."

I am again out of pocket today, but will make up for it with a vengeance this weekend . . .

Source: Fed Moves to the Sideline