On top of that, September has a well-deserved reputation of being a negative month for equity markets.
"You have seasonality, uncertainty with the Fed, uncertainty with Syria, the economic impact to what’s going on in the Mideast," said Philip Petursson, director of institutional equities at Manulife Asset Management.
"Syria will influence or impact oil prices, which could impact gasoline prices, which is a drag on economic growth in the back half of the year. There’s a lot of uncertainty."
The TSX closed last week lower but registered a 1.33 per cent gain for the month of August led by gains in gold stocks as investors bought up oversold gold miners while gold prices hit US$1,420 an ounce this week, a 3 1/2 month high amid escalating tensions in the Middle East and volatile currency markets.
Base metal miners also had a strong month on improving economic data out of China, the world's biggest consumer of copper.
The TSX actually outperformed U.S. markets, with the Dow industrials and the S&P 500 both falling away from recent highs that left the Dow up about 20 per cent for the year.
The Dow ended the month down 4.44 per cent, partly because of profit taking.
Markets were volatile last week as traders tried to assess whether the U.S. will lead a military strike to punish the Syrian government after an alleged chemical weapons attack. The international aid group Doctors Without Borders says at least 355 people were killed in the Aug. 21 attack in a suburb of the Syrian capital of Damascus.
"It seems like the U.S. is determined to make a strike in absence of UN support and that will create a fair bit of uncertainty in the marketplace," said Petursson.
Traders will also look ahead to mid-September and the Federal Reserve's next interest rate meeting.
Suspense has been building since late May when Fed chairman Ben Bernanke first mentioned the possibility that the central bank might cut back on its monthly US$85 billion of bond purchases, which have kept long term rates low and encouraged a rally on many stock markets this year.
Some analysts think that traders have accepted the strong possibility that the Fed will start cutting back on those asset purchases this month and wrap them up by mid-2014. The big question is the pace of that tapering.
"I think it has been priced into the markets," said Andrew Pyle, Senior Wealth Advisor and Portfolio Manager at ScotiaMcLeod in Peterborough, Ont.
"So unless they do something completely outside of that, like cutting the bond purchases in half, or if the Syrian situation continues to push oil prices higher and higher so the gasoline price is a negative for the economy then they could turn around in September and say, OK, not this month."
The Fed takes in one more major economic report prior to its meeting Sept. 18 — the non-farm payrolls report for August.
Investors are looking for the government to report that the economy created 180,000 jobs, up from 162,000 in July.
But data showing falling numbers of Americans filling for jobless benefits has persuaded some traders that the number could come in much higher.
"I’m hearing a lot of whisper numbers of 320,000 or 330,000," said Pyle.
"Maybe this is the month we get the real pop."
But he cautioned that such a strong read would roil markets because in addition to cementing the decision to start tapering, the data would raise concerns that the Fed will wind up its stimulus program sooner than thought.
Canadian employment data for August also comes out on Friday and economists expect that the economy created 20,000 jobs and that the jobless rate will stay steady at 7.2 per cent.
Such a positive showing would follow dismal jobs data for July when 39,000 jobs were lost.
Currency traders will also look to see the effect of the Bank of Canada's interest rate announcement on the beaten-down Canadian dollar.
The Bank of Canada is widely expected to leave its key rate unchanged at one per cent, where it has been since Sept., 2010. As usual, traders will look to any change in language in the accompanying statement that would change the consensus that the central bank won't move on rates until late 2014.
The loonie has tumbled about 2 1/2 cents during August on speculation about the Fed tapering its asset purchases. The greenback has also gained against many other currencies on worries about fighting in the Mideast spreading.