Sigh of Relief In Germany

The markets are nicely higher in early trading after a German court rejected a lawsuit intended to block Germany's participation in EU bailouts. Europe needs Germany's support in a big way, so this lawsuit had many investors worried.

Before Europe opened, Asian markets were also higher overnight, and our markets opened higher as well. The flight to safety trade that I talked about yesterday is being sold today. All 3 safehavens are lower.

To wit, Treasury prices are lower, pushing the 10-year yield up to 2.03%. The dollar is also lower today, helping to boost most commodities. But gold prices are off sharply, falling back to $1815.

In corporate news, Yahoo finally got rid of CEO Carol Bartz, and the stock is rallying.

I mentioned yesterday that the VIX was making a series of lower highs. Today, the VIX is down -8% to 34.15. It has not traded below the 30 level in over a month. I suspect we will get back down there at some point this month, but it will be interesting to see if it bounces higher from its 50-day average, if and when.

Trading comment: Given the poor start to the month, I wouldn't' be surprised to see the market lift a little higher in the short-term. But I am still not changing my intermediate-term game plan of remaining defensive. I am only looking to add to stocks that are both defensive and high-yielding. I also want to add back to some of the index etf hedges I took off in late August.