Earlier this week, I wrote a column here in Market Report titled “This Week's Major Trends.” In this editorial, I noted that three critical sector moves converged this week, and each one could have a major effect on your investment decisions.

The first one was the most important. I noted that with crude-oil futures dipping under $51 a barrel, oil prices hit 20-month lows, which represented a 17% decline since the start of the 2007 calendar year. Based on this dramatic move, I thought that it was the right time to buy longer-dated call options on Chevron (CVX:NYSE).

After all, CVX stock had peaked on December 15 at $76.20 a share, but had since fallen back down to around $70.35. As a tactical position, I considered it a good idea to use the oil price weakness to enter into longer-dated call options while premiums are still cheap.

If you followed along on this opportunity, then you may have noticed my recommendation in Dynamic Market Alert which said to buy the CVX June 70 Calls (CVX FN) at or under $4.60, good for the day -- which was published when the current bid/ask spread was $4.20 to $4.40.

As I write today, these calls have traded as high as $5.20, good for a nice little 18% overnight gainer. If you made this play, then you should go ahead and take your quick profits off the table.

I also noted that housing continues to recover -- and all the major homebuilder stocks continue to rally in today's session. This is providing a nice boost for our WOW plays, as each of our call options is having a nice upside day.

It just goes to show you, although the first 19 calendar days of 2007 have been difficult, it makes sense to pay special attention to specific sector-driven plays -- as each sector could provide you with a pocket of strength that results in short-term winners.