Coming Week: Rough Seas Ahead

Bob Auer, portfolio manager of the Auer Growth Fund, has found that a 1% change in the price of oil futures has recently correlated to twice as much of a change in related equities. Sometimes, he says, non-related equities have fluctuated in tandem as well.

"There will be more blind volatility, because I think people don't really know what's going on," says Auer. Though he predicts the market will end up on an oversell technical bounce, it "could be taking some pretty big swings depending on what comes out -- it could just go into total jubilation or it could totally freak out."

A report in the Wall Street Journal on Friday that the Treasury is prepared to announce a plan to rescue mortgage giants Fannie and Freddie could help financial and housing stocks or destroy them further -- depending on terms of the deal.

Few major companies are expected to report earnings -- the meager list includes Campbell Soup(CPB Quote), Verifone(PAY Quote) and Lululemon(LULU Quote). Nokia's warning on Friday, however, shows that we have officially entered the confession period, when companies start telling the market to brace itself for weak results.

"Next week is probably going to be a pretty tough week," says Johnson. "If we're going to get anything, it's going to be somebody pre-releasing something bad."

There is potential good news out of Apple(AAPL Quote), which is expected to unveil a revamp of its iPod music players on Tuesday.

Another important factor next week will be the initial jobless claims report set for release on Thursday. Such data have been consistently been above 400,000 claims in recent months, which in the past has been an indication of a recession or economic downturn. Some economists speculate that a government extension of unemployment benefits has created inflated figures. Still, all eyes will be on the report after eight straight months of job declines, as a gauge for how bad the economy has gotten and how much worse it might get.