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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.


Top Gun Options

) --

Top Gun Options

sees a big week ahead in terms of the latest round of quarterly corporate earnings, and Wall Street may be ready to place its radar firmly on home ground.

Maybe, provided of course, that a new wave of angst doesn't find its way over from across the Atlantic, or Iran and Israel decide to drop the gloves once and for all. They will by the way...

With a number of the equity market's heavy hitters scheduled to announce fourth-quarter earnings results, including

Goldman Sachs

(GS) - Get Goldman Sachs Group Inc. (The) Report



(GOOG) - Get Alphabet Inc. Report



(INTC) - Get Intel Corporation Report

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General Electric

(GE) - Get General Electric Company Report


American Express

(AXP) - Get American Express Company Report

, investors have a chance to get a clear read on corporate America's health.

With all three of the major indices slightly up on the year, the distinct possibility of an extended bullish push may be in the cards, should the fourth-quarter results meet or surpass expectations.

Last week, the

Dow Jones Industrial Average

clawed its way up by 0.5%, an outcome that hardly seemed likely Friday morning when investors sold off strongly in reaction to the latest round of eurozone sovereign debt fears. All but a third of that dive was recovered, however, allowing the Dow to finish the week in the black.

The benchmark

S&P 500

index also ended up for the week, just shy of a full percentage point at 0.9%. At 1289, the SPX continues to lurk just below the "psychologically important" 1300 level. A push past this level could initiate a round of buying that could catapult the index into territory not seen since the end of July 2011.

Lastly, the tech-heavy

Nasdaq Composite

index performed the best of the three, showing a solid profit on the week of 1.4%.

Like the

Select Sector Financial SPDR

(XLF) - Get Financial Select Sector SPDR Report

, the tech sector will be featured prominently over the remainder of this holiday-shortened week, and will likely follow the lead of industry bellwethers Google and Intel.

So, even though ratings agency Standard & Poor's downgraded the credit ranking of previously triple-A-rated France, as well as the lesser-ranked eurozone members Italy, Portugal, Spain, Cyprus, Slovakia and Slovenia, there is a high level of likelihood that good U.S. numbers will trump bad EU news.

That said, if the big banks' earnings reports fail to match up with analyst expectations, investor sentiment will turn sour and south, and the short week on Wall Street may seem like a long one to the bulls.

On the Options Front

With a number of key financial institutions issuing fourth-quarter earnings reports this week, there is the potential for a serious short-term move in the financial-services sector. Taken together with Friday being options expiration, which often ratchets up trading volatility, speculative traders have the opportunity to put on a trade that would profit nicely from any sharp market move that may follow.

Anticipating a specific direction that a particular stock or ETF might take as a result of earnings is always an "iffy" proposition. We don't like "iffy" at Top Gun Options. "Iffy" gets you killed or potentially wipes out your portfolio. However, betting on a sharp move, regardless of direction, somewhat increases the possibility of success. For such a trade, an option "straddle" is one way to go.

Here's one possible straddle to consider, which uses the

Direxion Financial Bull 3x

(FAS) - Get Direxion Daily Financial Bull 3x Shares Report

exchange-traded fund. FAS tracks the Russell 1000 Financial Services Index. It is a 3X-leveraged ETF, so any strong moves by the financial-services sector will be amplified accordingly.

Buy 1 FAS JAN12 75 Call

Buy 1 FAS JAN12 75 Put

Total Debit: 5.44

Firing Line

: It is important to note that we would exit this trade prior to market close on Friday. Profit target: 50%. Should the trade suffer a 25% loss, exiting the straddle would be prudent for us in our Model Portfolios, which are up nearly $5,000 in just two weeks of 2012 trading. Happy hunting and make sure you hedge!

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.