The biggest drag on this market, apart from uncertainty regarding politics, has been the price action in Apple and many premier names in the Nasdaq Composite Index. Despite outperformance by small caps, financials, emerging markets and derivative industrials/materials, the QQQ ETF for the Nasdaq-100 remains problematic.
Of course, observing the daily chart below, the issue is whether the light blue line-denoted head and shoulder top spanning most of 2012 is too obvious to trigger. While the jury is still out on that, this market has clearly been one in which too much aggression on the long side has not been justified.
The bear case should be obvious here–We go over the Fiscal Cliff, Apple continues to break lower along with the rest of the market.
The bull case is that pessimism is making a comeback, and the action in the VIX of late seems to imply that complacency has abated for now.