The market is slightly weaker in early trading, but financials have bounced from their lows are are now higher, bucking the broad-based weakness.

The energy sector is the biggest laggard, after the IEA reduced its global oil demand forecast by 1 million barrels per day. That is causing oil prices to dip below $50, and oil and gas stocks are lower as well.

The Wall St. Journal is reporting that talks between Microsoft and Yahoo are back on. Also, Express Scripts (ESRX) is paying $4.675 billion to acquire the NetRx subsidiaries from WellPoint (WLP).

In other news, Goldman Sachs (GS) is considering a multibillion share offering to help repay its $10 billion TARP loan. GS was initiated with a Buy rating this morning at Citi, and the stocks is nicely higher (+4.5%). Goldman reports earnings tomorrow morning, and the bar has likely been raised after Wells Fargo (WFC) preannouned sharply higher profits last week.

Asian markets were mostly closed overnight, while Japan fell a bit; the dollar is lower this morning, helping push gold prices higher; the 10-year yield is lower to 2.85%; and the VIX is +6% higher to 38.80, after falling meaningfully last week below its 200-day average support.

Trading comment: Last week I added some additional long exposure via the SSO and IYR etfs. We also took final profits on our gasoline etf (UGA), which is looking like a good call this morning.

This rally looks like it may be getting a little long in the tooth as it enters its 6th week off the lows, a natural resting spot. As such, I will look to take partial profits on some of our trading positions, and raise some cash, which I would then look to redeploy on a pullback. I still believe this active trading strategy will outpace the proverbial buy and hold strategy this year.

long IYR, SSO