In the summer of 2011, with Congressional adversaries posturing rather than working to strike a budget compromise that the public viewed as an obvious necessity, the stock market tried to play it cool. Having fallen around 7% from the year's highs in a bit over a month's time, the Standard & Poor's 500 index began a steady, imperturbable trudge higher, recovering most of what was lost in the prior tailspin in less than a month.

This also describes, with remarkable precision, the market's story since a month before Election Day 2012, when a post-vote selling squall focused manic attention on the coming Dec. 31 "fiscal cliff" deadline, only to give way to a stiff-upper-lip recovery. Interestingly, and without getting too entwined in the common numerical threads, the mid-November 2012 low in the S&P 500 and its July 2011 high were exactly the same: 1,353.

Whether this year's Wall Street-Beltway interplay continues to resemble last year's is a significant question for investors today, less than three weeks before the year ends. In 2011, at the three-week mark before the July 31 debt-ceiling witching hour, the markets lost their patience with the process and embarked on what was a nearly 20% drop over the next three months.

The Short Answer

The short answer is that the market does not seem as vulnerable to a tumble as nasty as last year's, mostly because back then the European debt crisis was flaring dangerously and threatening another bout of global credit contagion. European financial markets today have been pacified for the moment by belatedly aggressive central-bank support.

Yet the recent gentle rally of 6% has probably left the market open to any handy excuse to pull back, perhaps not so gently. A collective bout of disgust with the budget process is quite plausible as the days to the deadline click by — or, less intuitively, confirmation of the expedient compromise to avert the cliff that so many seem to expect could well invite a "sell-on-the-news" impulse.

A veteran financial advisor and close student of the market, who became known as the "mystery broker" for his anonymous citations in Barron's in recent years, pointed out the largely unnoticed parallels between the recent action and that of summer 2011. He has navigated 2012 well, entering the year fairly upbeat and favoring financial stocks, becoming more cautious around the October high point and issuing a tactical "buy" call near the mid-November lows.

Last week, he sent word of a "sell" signal with the S&P 500 at 1,428. He's uncomfortable with the resemblance to the summer 2011 experience but more tangibly is seeing signs of investor overconfidence in certain trading dynamics and surveys of professional traders.

Still, he writes in a client letter, "My opinion is that we will not have a repeat of the summer of 2011" because Europe isn't falling apart and stock prices and investor psychology are not as overextended.

An 'Underwhelming' Deal Ahead?

On the cliff scenario, he offers, "My view is that there will likely be a last-minute deal struck that will be underwhelming. My hunch is that investors will have some panic attacks between now and the end of the year as both sides posture. And after a 90-point run-up in the S&P 500, they will be quick to take profits in the short term."

The market is in a tricky place, (even more so than usual), with a fair amount of both upside and downside risk within easy reach. On the one hand, stocks are in the final stretch of what on paper appears to be a pleasantly "normal year," the indexes returning a low-teens percentage gain on rising corporate profits, improved credit conditions and receding volatility. Yet aside from those signs of speculative froth among fast-moving traders, most people remain crouched in expectation of another macroeconomic blow and haven't bought into the calmer, upward-tilting market.

The fiscal cliff fixation that quickly reached hyperbolic levels shortly after the election was never destined to spell the destiny of the economy or the markets -- and, arguably, last year's mostly unanticipated debt-ceiling game of chicken led folks initially to overplay the potential risks involved. Still, with the market having taken the advice not to panic to heart, a close artificial deadline offers an ideal opportunity to restart the anxieties.

Once the fiscal arrangement is more or less set, investors will be left again with a weathered, yet crisis-tested, bull market in need of a fresh source of wind in its sails as efficiency-driven corporate profits crest. The Fed's latest move this week to increase its bond-buying plan and target specific jobless statistics didn't provide an immediate boost to the market, another indication of short-term fatigue.

Yet one way to view this post-crisis environment is that the Fed's resolve now won't so much inflate asset prices outright but simply provide a constant "reserve bid" underneath the economy that could, over time, build into confidence that the U.S. expansion can at least persist for a good while.

The dream scenario for market optimists would be for this sentiment to take hold just as the cyclical drivers of global growth — China, domestic car sales, pent-up business investment, energy production and housing — pick up the pace. It's certainly plausible. But those who are confident in this cheery view will have to absorb plenty more political noise and probably wait until the market undergoes another of its frequent gut checks before knowing whether they'll come to be seen as prescient or Polyannas.