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

) -- This week may offer the bulls a perfect opportunity to gain some headwind as Wall Street sails into the New Year. All it will take will be a stream of positive economic data on the home front, combined with robust solutions to the European Union debt crisis offered up by its leaders ahead of next week's last EU summit of the year.

As the last two weeks have proven to be something of a bear's feast, it may be a tall order. Still, at

Top Gun Options we believe there may be reasons that the stars will align to reverse the recent trend.

The

Dow Jones Industrial Average

(DJIA) is coming off six losers over the course of the last seven sessions, shedding 7% of its value over this period. As of last Friday, the Dow was down 4.8% for the week, off 3% for the year.

Meanwhile, the

S&P 500 Index

(SPX) fared even worse, losing all seven of its last sessions. The SPX shaved 8% off its value, down over 4.5% on the week, and just under 8% for the year.

It ended last Friday below its 50-day Moving Average, which could prove to be, technically speaking, a hard level of resistance to overcome.

If a rally is to occur, which it looks like we're starting to see, it will require a concerted push from both sides of the Atlantic.

On the domestic front, Wall Street might be able to catch some wind in its sails from a combination of positive numbers out of the retail sector and the next round of economic data out of Washington.

The first

Black Friday sales numbers out of the retail sector indicate that consumers are spending in a big way, at least at the front end of the holiday season. If the trend continues into Cyber Monday (today), which is the online retail version of the post-Thanksgiving, pre-Christmas push, then investors may return to the market in droves.

Additional positive news may emerge from Wednesday's regularly scheduled and closely watched Beige Book report, the Fed's latest survey of the economy. If investors see some good news from Bernanke and Company, then any solid numbers to emerge from Friday's upcoming jobs report will be amplified, and could carry the market on an upward trend.

The potential logjam to a Bull Rush is the European Union, which has more or less been the prime mover of Wall Street over the last four months.

The final EU summit of the year coming up on December 9th, and the series of news and rumors that emerge prior to the event, will ultimately dictate the market's direction. Based on the initial news out of the EU on Sunday night, there seems to be a serious push to alter the euro-zone's debt structure in a major way, which is just what investors want to hear.

However, as has been demonstrated countless times before, Wall Street has been suckered by EU head fakes, as actions from EU leaders have failed to match repeated promises of unity and solutions.

This week's upcoming bond auctions by Spain, Italy, Belgium and France will go a long way towards revealing where investors currently stand, as over $25 billion in bonds will be put up for sale.

This Week's Fix on the VIX

The

VIX

I:VIX

(Chicago Board Options Exchange Market Volatility Index), appropriately dubbed the "fear index", continues its status as a key indicator in today's extremely volatile market.

As of late, and in spite of the strong downward trend, the VIX has remained at its recent mid-point trading range, and if it drops lower, say somewhat closer to 30, it would provide traders with a good opportunity to purchase some effective insurance against any strong, sharp moves to the downside.

While you can't trade the index directly, the VXX (S&P 500 VIX Short-Term Futures ETN) tracks the index just effectively enough to serve the purpose of using volatility to your advantage.

On the Options Front

With the aid of a powerful Black Friday push, it is possible that the retail sector will gain some steam heading deeper into the holiday season. One way to play the sector is with

XRT

(XRT) - Get Report

(SPDR S&P Retail ETF), which tracks the S&P Retail Select Industry Index.

Firing Line:

Consider the purchase of a near month, Out-of-the-Money Call to carry you past December's expiration date. As of Monday morning, XRT has broken past both its 50 and 200-day Moving Average. The JAN 12 55 CALL had a bid of .90 at the open, with open interest of 10,618.

If you wish to hedge this play, consider pairing it with a VXX option. If you do this, remember that the VXX, like the VIX, rises when the market goes down, and falls when the market goes up. 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.