Last week, the market backed off from resistance at SPY 113 and the upward momentum from July was stopped dead in its tracks. Economic conditions in China are starting to weaken and that weighed on the market. Conditions in the US are also deteriorating. Back-to-back initial jobless claims numbers were much higher than expected. The four-week moving average is on the rise and that does not bode well for August’s employment report. The Fed lowered its GDP forecast for 2010. In its FOMC statement last week it reiterated that challenging conditions lie ahead.