TORONTO - Investors will be looking to see if last week's slide on the Toronto stock market will turn out to be another buying opportunity for those looking for an entry point or the start of a long-awaited correction.

The main S&P/TSX composite index slid 4.14 per cent last week, taking the market to its first monthly loss since February, before a rally that ultimately pushed the TSX up well over 50 per cent from the lows of early March.

The drop also came amid news that the Canadian economy unexpectedly shrank by 0.1 per cent during August, following a flat performance in July.

"I think the market was getting a little bit fatigued," said Steve Uzielli, director portfolio advisory group, portfolio manager at ScotiaMcLeod.

"The market is being selective and has to have more impressive catalysts to take the market to a new level."

Most of the losses were racked up in the final week of trading. By the middle of last week, the TSX was down six per cent on four consecutive losing days as worries increased about the U.S. economic rebound in the wake of data showing sliding consumer confidence and lower than expected home sales.

Danielle Park, president and portfolio manager at Venable Park, says she was with the TSX rally until June, a time when the market was up 41 per cent from the March lows and ahead about 20 per cent for the year.

"Since then the disconnect between what the strength of the recovery is looking like in reality and what's happening with pricing of risk assets has really disconnected again," she said.

"It's very difficult to make a fundamental argument for why stocks have done what they have done since June."

One of the things that worries Park about the near relentless performance on the TSX is that trading volumes have been lower than they should be in such an apparently strong market.

"Volume has to be contagious, it has to pick up, it has to spread like a virus, right? But you haven't seen that," she observed

"It's the kind of market where you see this kind of incredible spike on the lowest volume ever, which is staggering. Literally, we have a chart showing all of the remarkable rallies after big downturns and 2009 is the biggest with the least volume ever and it's gone on now for several months."

Park allows that anything can happen in what she calls an environment "where crazy things have been happening" but she's convinced that the market has to undergo a "meaningful" test of lows.

"It has to happen and whether it ends at (last) November's lows or if we get anything worse than that, I'm not even forecasting that," she said.

"All I'm saying is that no meaningful test has been had and no bull market every just takes off like that with no looking back, it just doesn't happen."

As for investors still sitting on cash and wondering if this is a good time to get into the market, Park counsels: "wait a little longer."

In economic news this week, the U.S. Federal Reserve has its scheduled announcement on interest rates on Wednesday.

The Fed is widely expected to keep rates near zero and reassure that it will continue to do so for the foreseeable future. BMO Capital Markets has suggested the central bank will also hopefully acknowledge a pickup in economic activity and a stabilization in consumer spending.

The major event is on Friday when the U.S. Labour Department and Statistics Canada release their latest reading on employment.

Economists expect the U.S. economy shed another 175,000 jobs during October on top of the 262,000 in September, along with a rise in the jobless rate to 9.9 per cent from 9.8 per cent.

And in Canada, Statistics Canada is expected to announce that the economy actually gained 10,000 jobs during October, adding to the 30,600 jobs from September. Economists expect the unemployment rate will edge up 0.1 per cent to 8.5 per cent.

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