NEW YORK ( TheStreet) -- Trading this week looks to be dominated by Syria and the Federal Reserve as investors await a U.S. monetary policy decision later this month.
A gradual recovery is already priced into traders' minds, and now the pace of growth dominates investor sentiment. Until economic indicators begin to outperform mild expectations, as opposed to simply meeting them, the market will continue to rely on monetary stimulus for support.
Meanwhile, Syrian President Bashar al-Assad went on record this past weekend to say that Syria hasn't used chemical attacks and that the West shouldn't interfere with Syrian issues. Further involvement from the U.S. and other Western powers would scare investors out of the market and be another excuse for a U.S. equity market correction.
The first chart below is of SPDR S&P 500 (SPY). A more technical view of markets may give investors guidance as well.The 167 level on the chart stood as the major resistance point that pushed the market lower in May. More recently, it held as resistance in mid-August, causing the S&P 500 to break out lower out of its head-and-shoulders reversal pattern. Chinese data this week could stand as a catalyst for support or a push lower after a flurry of data was released from the U.S. last week. (TLT). The long Treasury bond has been heavily sold off since May. The issue is no longer whether the Fed will taper, but by how much. The expectation level sits at about a $10 billion cut from current monthly bond purchases. What will move markets is the amount of the cuts. If the Fed doesn't cut enough, then bond prices will rally, and if the Fed cuts more than expected, then interest rates will go up even higher. Follow @AndrewSachais This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.