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WB, It doesn't matter what Bernanke says, market is going up, so far. Recalling the last time when he spoke, market was down on that day, then, did monster rally. Market is waiting for small investors, but I don't think that they will not come in at this level. DOW COT shows very low open interest... it is foolish to chase at this level.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=21364216

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HIGHLIGHTS-Excerpts from Fed Chairman Bernanke's Q&A

WASHINGTON, July 18 (Reuters) - Following are selected highlights from Federal Reserve Chairman Ben Bernanke's question-and-answer session on Wednesday to the House Financial Services Committee:

ON HOUSING:

"The evidence so far is that there has been no spillover that we can see" from the housing market to the broader economy or consumer spending.

"The related concern on the downside risk is that in order to clear out those (home) inventories we might start seeing falls in prices. The question is would moderate price declines have any significant impact on consumer spending?"

ON SUBPRIME:

"I think there is a balance. I do believe the legitimate subprime lending, in particular, helps expand homeownership, helps expand access to credit; at the same time it is very important to protect those who are possibly subject to abusive or fraudulent lending.

"We have to make sure we find ways to prevent the bad actors, the abusive lending, while preserving this market, which is an important market, both for the sake of those people who would like to borrow and become homeowners and also for the broad sake of our economy, in maintaining the demand for housing."

ON INFLATION, OIL PRICES:

"The energy markets currently see oil prices remaining high but leveling off for the next couple of years to a point where, if that actually happens, overall headline inflation will be about the same as core inflation.

"There is nothing we can do to affect oil prices."
ON U.S. TRADE DEFICIT:

"Relying entirely on exchange rate changes to improve the trade balance is a mistake.

"It's important that there be structural changes that affect the ratio of domestic and foreign demand.

"The trade deficit actually has shown some signs of looking a bit better. That's been disguised, to some extent, by the fact that oil prices have gone up so much and so the oil import bill has risen."

ON CHINA AND YUAN:

"I do think it is in China's interest to allow their currency to float.

"The level of the currency essentially distorts the economy and puts more resources into the export sector.

"I think that, in addition to currency change, though, that they ought to take additional structural measures to try to encourage domestic consumption so that even at a given value of the exchange rate the economy will be more focused on domestic demand rather than on the global market."

ON HEDGE FUNDS:

"They certainly are a benefit to the economy. They provide a good deal of liquidity in the markets."