These are risks for markets in week ahead

Expect another wild ride for markets in the week ahead.

Wall Street gets back to business Tuesday after the Martin Luther King holiday Monday. But even before U.S. stocks open, traders will already be reacting to a batch of key Chinese data to be released Monday night, as well as fluctuations across global markets, including oil and currencies.

Stocks melted down Friday but recovered their worst losses to close 2.2 percent lower, about the same as the loss for the entire week. The S&P 500 closed Friday at 1,880 and is now down 8 percent since the beginning of the new year. At the same time, buyers have been moving into the safety of the Treasury market, pushing yields to lows last seen in the fall. Oil prices, at the heart of the cross market sell-off, lost more than 10 percent for the week and broke through the $30 per barrel level.

Traders work on the floor of the New York Stock Exchange
Brendan McDermid | Getty Images
Traders work on the floor of the New York Stock Exchange

"There's credit concerns. There's oil concerns, and there's China concerns. I think they're all over done personally, but I think it's hard to be sure about what's going on in China. We got a lot of data this year, and it all looked OK, but I don't think anyone trusted it," said Jeff Kleintop, chief global investment strategist at Charles Schwab. "Credit concerns seemed to be concentrated in the energy producer and high yield part of the market place. It's a sign the downtrend in oil is having bigger, deeper, broader effects. … That seems to be the big driver for markets." China releases industrial production, retail sales and GDP on Tuesday morning.

Friday's sell-off, in part, was the result of traders clearing the deck ahead of the key data, analysts said. "China releases a bunch of data Monday, and I think that's part of it," said John Canally, economist and strategist at LPL Financial. "China's not going to resolve itself this year or next year. It's going to be years. I just don't think you're going to get clarity."

Read MoreWhy the correction? Machines have taken over

The big concern among investors in the past week was whether plunging oil prices and rocky markets were signaling the onset of a recession. But while strategists do not foresee a recession this year, they do see a sluggish U.S. economy that could hold back earnings growth, denting stock prices in the process.

"A catalyst to end this now would be if we find out that the recovery is not heading south. There's going to be some piece of data that convinces us that the U.S. is still growing at the same old 2-percent pace," said James Paulsen, chief investment strategist at Wells Capital Management.

Read More Fed's Dudley: Rates to rise gradually, outlook unchanged

U.S. data in the coming week includes home builders' sentiment Tuesday, CPI Wednesday and existing home sales Friday.

The S&P 500 is now off 11.9 percent from its high, and the other big question is whether the correction in stocks is the onset of a bear market, or just another correction in a bull market. (A bear market is a 20 percent decline from the highs.) For the S&P, that means 1,707.78. The Nasdaq is now 14.6 percent off its highs and it would be in bear market territory if it hit 4,185. The bear level on the Dow would be 14,681. On Friday, the 10-year yield briefly dipped below the psychological 2-percent level but moved higher to 2.03 percent late in the day.

"A month ago, people had the view we were going to have 2 percent growth in the U.S.," said Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management.

"What fundamentally has changed over the past four weeks is hard to identify what it could be…it's more a risk premia adjustment….the risk is this becomes a self-fulfilling prophecy," he said.

Economists have been knocking down fourth-quarter growth forecasts and now see it tracking at about 1.1 percent, according to the CNBC/Moody's Analytic's rapid update.

Read More This could be the new currency to watch

"I don't see a lot of strong evidence that there's going to be a recession in 2016. None of the indicators I look at show a high probability," said Caron.

Analysts say corporate earnings season may be the spark to turn the market. Blue chips like IBM, American Express and General Electric report this week, as are a number of financials including Goldman Sachs, Morgan Stanley and Bank of America.

"I always think you get a fairly clear picture of the earnings season early on," Paulsen said. "I'd have to say this one is already feeling different than most of the time when you get a lot of downward revisions … and they outperform. So far, this feels like it's underperformed already lowered expectations. We'll see if there's a continuation of that trend. The reason that would be very important is because people are worried about an earnings recession." Paulsen said it would be a change for markets if earnings don't beat the already lowered bar, and cause even more selling.

Read MoreBuying opportunities, volatility ahead: El-Erian

"The risk of next week is we find it's asymmetrical to the downside. There's more risk that it's going to disappoint," he said. "We haven't had one of those in a while."

But Kleintop said earnings could also offer clarity on what ails the market. "Last quarter, we heard from industrials about weakness in China, but we heard from consumer companies that things were good," he said. "Does that change?"

Earnings are expected to decline 4.7 percent for the fourth quarter with the biggest hit coming from the energy sector.

"We're neutral on the market but we think it's going to be a lot like last year," said Kleintop. "We don't think it's going to be a bear market, but a correction. We think we rebound from this but there will be lots of ups and downs." He expects stocks to end the year basically flat.

Read More Warren Buffett hurting, on pace to lose $2.3B

Monday

U.S. markets closed for the Martin Luther King holiday

Tuesday

Earnings: Bank of America, Morgan Stanley, Unilever, UnitedHealth, Charles Schwab, Comerica, IBM, Netflix, Linear Tech

10 a.m.: Housing market index

4 p.m.: Treasury international capital

Wednesday

Earnings: Goldman Sachs, F5 Networks, ASML Holdings, Northern Trust, TD Ameritrade, SLM, Texas Capital Bancshares, Raymond James, Commerce Bancshares, Xilinx

7 a.m.: Mortgage applications

8:30 a.m.: CPI

8:30 a.m.: Housing starts

Thursday

Earnings: American Express, Travelers, Fifth Third, ETrade, Starbucks, Intuitive Surgical, Union Pacific, Verizon, Bank of NY Mellon, Alaska Air, Southwest Air, JB Hunt, KeyCorp, Canadian Pacific Railway, Schlumberger, People's United Financial

8:30 a.m.: Jobless claims

8:30 a.m.: Philadelphia Fed business outlook survey

10:30 a.m.: Natural gas inventories

11:00 a.m.: Oil inventories

4:30 p.m.: Fed balance sheet, monetary supply

Friday

Earnings: General Electric, Kansas City Southern, SunTrust, Legg Mason, Synchrony Financial, SAP

8:30 a.m.: Chicago Fed national activity index

9:45 a.m.: Manufacturing PMI

10 a.m.: Existing home sales

1 p.m.: Oil rig count