This post was written by Minyanville contributor James Kostohryz
I believe that the market is currently poised in a binary position.

Better than expected earnings and/or guidance by the major banks and/or other major companies this week could send the S&P 500 flying past its 200 day moving average triggering a wave of long purchases and short covering (note that short interest has been rising sharply in the past few days).

On the other hand, disappointment from any of the major financials such as Goldman Sachs(NYSE:GS), JP Morgan (NYSE:JPM) or Citigroup(NYSE:C) and/or major companies reporting this week such as Intel (NASDAQ:INTC)or Google(NASDAQ:GOOG)could send the market reeling into a quick 10% correction.

Here is my baseline view of the week, subject to change at any moment.

UltraShort S&P 500 ProShares (NYSE: SDS) is recently trading down 84 cents to $88 in pre-open trading. SDS seeks daily investment results that correspond to twice the inverse daily performance of the S&P 500. SDS January option implied volatility of 94 is above its 26-week average of 68 according to Track Data, suggesting larger price movement.

UltraShort QQQ ProShares (NYSE: QID) is recently down 1.95 to $68.35 in pre-open trading. QID seeks daily investment results that correspond to twice the inverse daily performance of the NASDAQ Index-100 Index. QID January option implied volatility of 108 is above its 26-week average of 87 according to Track Data, suggesting larger price movement.

UltraShort Financials ProShares (NYSE: SKF) is recently is recently down $2.97 to $127.89 in pre-open trading. SKF is an exchange traded fund seeking daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials Index. SKF January option implied volatility of 155 is above its 26-week average of 99 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

UltraShort S&P 500 (NYSE: SDS) is closed at $112.94 Wednesday. SDS seeks daily investment results that correspond to twice the inverse daily performance of the S&P 500. SDS December option implied volatility of 140 is above its 26-week average of 58 according to Track Data, suggesting larger price movement.

UltraShort QQQ ProShares (NYSE: QID) closed at $89.25 Wednesday. QID seeks daily investment results that correspond to twice the inverse daily performance of the NASDAQ Index-100 Index. QID December option implied volatility of 139 is above its 26-week average of 75 according to Track Data, suggesting larger price movement.

UltraShort Financials ProShares (NYSE: SKF) is recently is recently up $1.67 to $224.50. SKF is an exchange traded fund seeking daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials Index. SKF December option implied volatility of 185 is above its 26-week average of 95 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

UltraShort S&P500 ProShares (AMEX: SDS) seeks daily investment results that correspond to twice the inverse daily performance of the S&P 500. SDS July option implied volatility of 42 is near its 26-week average according to Track Data, suggesting non-directional price movement.

UltraShort QQQ ProShares (AMEX: QID) seeks daily investment results that correspond to twice the inverse daily performance of the NASDAQ Index-100 Index. QID July option implied volatility of 51 is near its 26-week average of 51 according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

If you've ever delved into investing in ETFs (exchange-traded funds, basically entire indexes and sectors that trade like stocks), you're already familiar with the most popular, those being Powershares QQQ Trust (Nasdaq: QQQQ), SPDR Trust Series 1 (AMEX: SPY), Diamonds Trust, Series 1 (AMEX: DIA), iShares Russell 2000 Index (NYSE: IWM) and lately Financial Select SPDR (AMEX: XLF) and UltraShort QQQ ProShares (AMEX: QID). But have you ever looked into those that are much less followed, but more capable of yielding some big-time returns?

I primarily trade fun smallcap stocks, so until the past few days, I hadn't either. But when I began researching, I just kept finding more and more interesting ETFs -- it was addictive! Almost addictive as my new Twitter account where I've discovered I can chat with business legends, yesterday it was the founder of eBay Inc (Nasdaq: EBAY). Okay, maybe ETFs will never be that addictive!

Out the few hundred ETFs I looked into, here were some of the more interesting of the bunch:

For those who wish to hedge a portfolio against downside risk, Nate Pile suggests a pair of ETFs that benefit from a market decline. Here is the latest from his Nate's Notes.

"Although I would argue that much of the potential bad news has already been factored into stock prices, one of the mantras I have come to respect over the years is 'don't find the trend'... and the trend is currently down.

"Thus, I believe it would be foolish to not take at least a few cautionary steps with regards to protecting our portfolios until it becomes more clear just how bad things are going to get.

"As a result, I am recommending two 'short fund' ETFs as short-term investments -- ProShares UltraShort Dow 30 (AMEX: DXD) and the ProShares UltraShort QQQ (AMEX: QID). Both are designed to provide results, before fees and expenses, which correspond to the inverse of the performance of their respective indexes.