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.



) -- Emerging from last week's EU Summit, European leaders apparently managed to say just enough of the right things to sooth investor fears and give the market a bullish jolt. But after several months of extreme mood swings by the market, it will take a steady stream of good news to turn that jolt into a steady trend.

Wall Street is currently on track for one of its best Octobers ever, with the major indices gaining enough over the course of the last two weeks to place both the

Dow Jones Industrial Average

(DJIA) and the

S&P 500 Index

(SPX) in the black for the year, at least for the moment.

The Dow ended the week 3.6% higher, at 12,231, making it five weeks in a row of gains for the blue-chip index. The S&P 500 ended up 3.8% on the week, finishing at 1,285. It was the fourth consecutive week of gains for the benchmark index. The

Nasdaq Composite Index

(Comp), meanwhile, traded in last week's slight loss for a 3.8% gain. It ended Friday's session at 2,737.

For many traders and investors, one of the key things to have happened this past week was the fact that both the Dow and S&P 500 broke through their respective 200-day Moving Average, the first time since that has happened since early August.

Technically speaking, the question the

Top Gun Trading team is asking this: Will the 200-day MA now turn into a level of support, as it frequently does, or will the piercing of the average turn out to be short-lived, and morph into a new level of resistance?

The answer should reveal itself pretty clearly this week. Here's why:

The EU crisis has hung over the market like a migraine, with the fear of default by Greece acknowledged as more likely than not. Amplifying that fear has been the specter of contagion among the PIIGS (Portugal, Italy, Ireland, Greece, Spain), with investors concerned that a default by Greece could lead to similar actions by one or more of the EU's Southern members, all burdened with an unsustainable level of debt. To a certain degree, the fear has been tempered by last week's announcement from EU leaders, who agreed to increase the "firepower" to prop up eurozone banks, if and when the need arises. However, if investors feel that another round of bailouts won't really solve the EU's debt crisis, the market could quickly slip back into the red.

But for the moment, at least, the EU fix seems to have mollified investors. But knowing a little bit about firepower and dropping a couple tons in my career, this shot sounds like a dud.

Now, Wall Street will turn its attention to the U.S. economy.

Announcements by the Fed on Wednesday, followed by unemployment reports on Friday, will reveal a lot in terms of our economic health. If the news is positive from these, as well as other government reports due out this week, then there is a good chance that the market will gain some traction and continue the upward trend into year's end.

On the Options Front

Last Friday, there was some unusual options activity on

U.S. Steel

(X) - Get Report

, with options volume coming in at about 2.5 times the normal daily average. The increase was hugely on the side of near-month calls, indicating that traders had expectations that a rise in the underlying stock price would occur within the next two weeks. Iron-ore, an essential element in the steel-making process, has fallen by 30% in the past month, largely attributed to China's factories decreasing demand. Cheaper ore gives U.S. Steel the potential for bigger profit margins, resulting in an improved bottom line.

Firing Line:

If you think this steel train is worth jumping aboard, consider purchasing the near month, slightly out of the money calls, such as Nov 28 C. Or to help offset the rich premium, consider the Nov 26-28 call spread, which was the top trade on Friday and sold at .90. 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.