Little Confidence Seen in Greek Plan

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Top Gun Options) -- It would seem to the Top Gun Options trading team as if investors have factored in the current round of noise emanating from across the Atlantic. How else to explain the fact that, in spite of the news that Greece finally signed off on the latest round of bailout funds, all Wall Street could do was shrug and nudge higher by a couple of points?

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True, it was somewhat anticlimactic as the eurozone finance ministers approved over $170 billion in loans that would allow Athens to meet its latest round of debt obligations. There were few, if any, surprises in the agreement that requires Greece to comply with a new wave of austerity measures, including the promise to severely reduce its unwieldy debt-to-GDP ratio. The ratio currently sits at around 160%, and Greek leaders must somehow find a way to lower it to 120% by 2020.

With elections due to take place next month in the beleaguered Mediterranean country, the big question investors are likely to ask is this: If the country elects a new set of leaders, as is expected, will they honor the current commitments that have just been made? As evidenced by the quiet response to the latest deal, skepticism certainly remains.

The Dow Jones Industrial Average managed to scale a psychologically important wall, at one point climbing past 13,000. It was the first time since 2008 that the level has been reached. However, without any particular reason to climb higher, the Dow got swatted back down to 12,965, though it did end up 15 points on the day.

Also ending the day on the upside was the S&P 500 Index (SPX). The benchmark index has managed to stay above the 1,300 level for the last several sessions, and if it continues to build a level of support at that line, it could resume the strong push higher that has carried it over 100 points higher on the year to date.

A Look At the VIX

The Chicago Board Options Exchange Market Volatility Index ended the first trading day of this holiday-shortened week at 18.19, trading in a 10% range intraday. This reflected the uncertainty that remains even after the Greek bailout deal was completed on Tuesday. Remaining close to the bottom of its seven-month trading range, the VIX continues to provide traders and investors with a cost-effective volatility hedge.

And, for anyone who may doubt it, this market remains highly susceptible to mood swings and news blasts. In spite of whatever paper any member of the eurozone happens to sign, particularly regarding debt, the market remains doubtful that any proposed fix is anything but short-lived. The most liquid of the VIX derivatives, such as iPath S&P 500 VIX Short-Term Futures ETN (VXX), remain as hedging tools of choice for protecting your portfolio at a reasonable cost against a "Black Swan" type of event.