Equity markets have become overstretched, having advanced solidly since the March bear market bottom. And very likely some sort of correction is in the cards, if only a relatively short one.

Longer term, however, one could argue that certain sectors will continue to grow, benefiting from a rebound in the global economy.

For the TSX, the sectors most likely to experience robust growth going into 2010 are energy and materials. Longer-term demand for these resources is unlikely to wane. Suggesting that prices are likely to improve as existing inventories are depleted and new production lags.

So despite the view that a pullback is likely, a bullish case can be made for long-term bullish positions in select liquid, optionable energy and mining issues, as well as in optionable exchanged-traded funds such as the iShares CDN Energy Sector Index Fund (TSX: XEG, $17.81). Specifically, you could look at buying the XEG March 18 calls at $1.30.

In the materials sector, you could look at Agrium (symbol AGU, recent price $52.57) January 54 calls at $3.50. More conservative investors might consider covered calls or cash secured puts on AGU. That is buying the shares at $52.57 and writing the January 56 calls at $2.70. If you prefer cash secured puts, look at writing the AGU January 48 puts at $2.20 per share.

When writing puts, remember that you are assuming an obligation to buy the underlying shares at the strike price of the put. In this case, $48 per share. As such, when we say “cash secured” puts, it means that you have sufficient cash in your account to buy the stock should the put be assigned. If you are writing say five puts you have an obligation to buy 500 shares of AGU at $48 per share, which means you should have set aside $24,000 ($48 x 500 shares = $24,000) in case to meet your obligation.