Low expectations for 2012 has turned into a 12% increase in price (plus another 2% in dividends) for the S&P 500. At 1,416, however, the S&P is pretty much where it started November and September.
While no one knows what damage the fiscal cliff will bring, the market seems to be shrugging it off for now. Not only is this surprising, but the fact that the market hasn't sold off stands out because many investors tend to sell stocks at the end of the year for tax purposes. Year-end tax selling should especially be the case this year since most believe capital gains and dividend tax rates will be going up.
So, in the face of some obvious challenges, the market has held up well.