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

) -- The Bulls continue to rampage through the new calendar year, with 2012 so far providing Wall Street with one of its fastest starts since 1987. Still, the

Top Gun Options

trading team sees a number of obstacles remaining directly in the path of the upward trend.

The European Union sovereign debt crisis remains on the radar of Wall Street in a big way, though investors seem eager to focus on the improving metrics provided lately by both U.S. government reports and slightly better than expected fourth-quarter earnings reports. The Friday morning report released by the U.S. Department of Labor, indicating a drop in the unemployment rate to 8.3%, sent the market into a solid surge, where it remained for the most part throughout the day.

There seems to be a tacit acknowledgement by investors that, as long as the eurozone problems are reined in to a certain extent, perhaps defined by key EU leaders' continued search for suitable solutions, good news on the domestic front trumps the deeper fissures within the EU.

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For now, at least, the shorter-term trend is strong. On Friday, the

Dow Jones Industrial Average

attained levels not seen since May 2008. The

Blue-Chip Index

ended the week at 12,862, up 1.6%.

Meanwhile, the

S&P 500 Index

(SPX)

did even better, as the benchmark index headed north to the tune of 2.3% for the week. The SPX now has risen five weeks in a row, as of last Friday gaining 6.9% this year.

Technically speaking, the SPX, which offers a better snapshot of the market than the narrower-based DJIA, has two strong characteristics going for it that might suggest the Bull Run can continue, or at least pause for a breather without too much retreat. First off, the SPX has broken through its 200-day Moving Average at the beginning of the New Year, and it hasn't really looked back since. In addition, in the process of the recent five-week run-up, the benchmark index has also broken above the psychologically important 1,300 level and has managed to stay there, aside from a single intraday probe to that line.

No doubt it will be tested again in the near future. Whether 1,300 turns into a level of support or becomes one of resistance, will give a pretty good reading on the trends momentum.

The coming week will reveal whether the EU sovereign debt crisis will reemerge to the forefront of investor concerns, as talks by the "troika" of the European Central Bank, the International Monetary Fund and the European Commission, shall once again focus on Greece's ability to meet the conditions required by lenders in exchange for receiving another massive infusion of bail-out funds.

The massive asterisk with all of this is the tension between Iran and Israel, with Israel saying they've about had it with the U.S. and its attempts at "diplomacy" with Iran. Unfortunately we will either wake up one day to a nuclear Iran, or a bombed one -- those are the only two choices. At

Top Gun Options

we're looking to protect ourselves by buying some farther out calls on the VXX.

On the Options Front

Freeport McMoran Copper and Gold

(FCX) - Get Report

celebrated the New Year by breaking out of a two-month long sideways pattern. FCX, a copper, gold and molybdenum mining company, has now gained more than 20% on the year, and, like the SPX, broken past its 200-day MA. However, it has slowed its upward momentum and is now consolidating. In addition, its MACD is pulling back to zero. Fundamentally, FCX has experienced a drop in reported earnings over the last several quarters.

Taken together, one possible trade for FCX would be a Vertical Spread that bets that the stock tops out at the $50 level over the course of the next six weeks. Breakeven for the trade is 50.70.

Sell 1 FCX March 12 50 CALL

Buy 1 FCX March 12 55 CALL

For a credit of .70

Firing Line

: We would hold this trade in our

Primary/Intermediate Model Portfolio

when it potentially achieves 95% of the credit, or, if the trade starts to break down, eject at the 30% loss level. Discipline and risk management are needed to achieve superior execution in today's market. 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.