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 (

TheStreet

) -- Wall Street seems ready to party in 2012, with the

Dow Jones Industrial Average

(DJIA) gaining over 2% in the first hour of the first trading day of the New Year. Whether that is a display of enthusiasm that often accompanies any endeavor that offers a clean slate, or whether there are some fundamentally sound reasons for investors to focus on equities, remains, of course to be seen.

At

Top Gun Options, we're seeing some interesting contacts on the trading radar. The first wave of economic data from out of Washington would certainly seem to indicate that the economy is headed in the right direction. The Institute for Supply Management's manufacturing index (ISM) rose by over 1% for December, slightly higher than was expected by many economists. The reference point for the ISM is 50, as expansion in the economy is indicated by any number over 50%.

The benchmark S&P 500 Index, which has been stymied by its own 200-day Moving Average as of late, broke through in early morning trading, leaving it just above the level that it found itself back at the beginning of 2011. If it can rise above 1300 during the next few weeks, a neighborhood that hasn't been visited in over five months, the Bulls may take it as an indication that the year belongs to them, and large quantities of cash may flow back into the equity market.

The VIX (Chicago Board Options Exchange Market Volatility Index), often referred to as the "investor fear gauge," finished the year at 22.50, leaving it towards the low range of its most recent five-month run. This relatively low level of the

VIX

I:VIX

would seem to indicate that the fear over the European Union's sovereign debt crisis has already been baked in to the market.

This current price level of the VIX makes it attractive as a volatility hedge, especially if you are now ready to put some bullish chips down on stocks and commodities. The explosive nature of the VIX allows you to buy a relatively small amount of insurance as protection against the flock of "black swans" that may, by their nature, descend on the global economy at any time.

On the Options Front

Gold ended 2011 close to its July level, right before it shot up over 20% in less than two months. Since then, of course, it as retreated to that very same level, leaving it formally in "correction" territory, where it has been floundering for several weeks. Now, however, it may have found a new level of support, providing a new round of buying opportunity.

You can use the

SPDR Gold Trust ETF

(GLD) - Get Report

, which tracks gold bullion, to place a bet that gold will return to the radar of both bullish speculators and international sovereign funds in a big way.

Firing Line: Here's a potential trade to go long the precious metal:GLD MARCH12 170 CALL (Debit of 1.85) As a stand alone hedge, meaning that you are not factoring in any hedge to the equation, exit the trade at a 100% gain or a 50% loss. Or consider selling an upside call to lower your cost basis. 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.