Uncertainty is keeping money on the sidelines right now. Certainty, no matter the flavor, would rally the markets because we're desperate for any semblance of progress from Washington after so much gridlock.
The lame duck congress will get a tax bill passed before year end (one is already past the house and sitting in the Senate), but I don't see them fixing the sequestration. So, we'll get a one year patch on the tax side with no resolution on the spending side. Maybe a slight rally when the tax bill passes as hopes rise again, but I think the last two months of the year will be turbulent as the market slowly realizes Washington will not provide the desired certainty.