Europe, Facebook Set to Dominate Coming Week

"For the foreseeable future, we will continue to have noise from Europe, and that's all that is, noise," said Cote.

Meanwhile, Facebook is looking to raise about $10.6 billion in its much-anticipated public debut in the coming week. The social networking giant has set a price range of $28-$35 for the shares, which are expected to price after the market closes Thursday.

There have been mixed reports so far about how heavy the interest in the stock is at those levels following the start of the company's roadshow this past week.

Day expects that if Facebook's IPO does relatively well, it will have a "positive, but modest positive" effect on the markets. But, if Facebook's IPO turns sour quickly, that could have a bigger influence on trading, Day said, adding that he does not anticipate a Facebook flop.

There will also be continuing fallout from JPMorgan's stunning announcement of a $2 billion mark-to-market loss in its synthetic credit portfolio. The Securities and Exchange Commission is now looking into the matter, and both Standard & Poor's and Fitch Ratings lowered their credit ratings on the bank late Friday.

The economic calendar for next week includes retail sales and the consumer price index for April on Tuesday, housing starts on Wednesday and initial jobless claims on Thursday.

"Retail sales is the biggest one because right now retail sales is actually at an all-time record high," Cote said. "If there's another month of growth, they'll be at an all-time record." The consensus is looking for an increase of 0.2%, according to Briefing.com.

Cote sees a disconnect between recent jobs reports and retail sales numbers.

"I think the job growth number has been severely understated, and I think there will be positive revisions," Cote said. "The math doesn't add up. You can't have such robust retail sales with those job numbers."

Weekly initial jobless claims are anticipated to be 365,000, according to Briefing.com, compared with 367,000 this past week.

It's also a big earnings week for retailers with results from Home Depot(HD) , J.C. Penney(JCP) and TJX(TJX) on Tuesday; Target(TGT) on Wednesday, and Wal-Mart(WMT) on Thursday.