With a lack of major catalysts expected in the coming week, market observers say that traders and investors could very well be on bankruptcy watch as several companies continue to struggle.

General Motors ( GM) shares slid to $1.27 on Friday -- their lowest level in more than 70 years -- after the automaker's auditors expressed doubts about the company's viability given its staggering losses. On Friday, word spread that General Motors was becoming more open to the idea of bankruptcy.

Fellow Dow Jones Industrial Average component Citigroup ( C) crumbled during the previous week, sending shares into penny stock land, as nationalization fears persisted.

A rash of Chapter 11 bankruptcy filings were announced in the past week, including telecom shop TelePlus World, horse track owner Magna Entertainment ( MECA), RV maker Monaco Coach ( MNC) and speaker maker SLS International, among others. Reports also surfaced that auto parts supplier Visteon ( VC) could file as early as next Tuesday.

"We're getting to where we could have some big failures of banks and big industrial failures," said Steven Sheldon, CFA and principal with SMS Capital Management. "We're not there yet, but we're looking for something to grasp to that would suggest we're stabilizing."

Tom Lydon, president of Global Trends Investments, said that with all eyes on the situations with GM, Citigroup and the other banking stocks, Main Street might reach its breaking point and will start pushing for the government to stop bailing out troubled companies.

Simply put, Lydon says that during the coming week the U.S. is on bankruptcy watch.

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