The election continues to be about the things that divide us. The makers versus the takers. The 47% versus the 53%. The 99% versus the 1%. Much of that is political bluster.

But a real rift is forming between average consumers, who are feeling as good as they've been since 2007, and CEOs and investors, who are growing increasingly concerned about a list of nagging worries, including the unresolved "fiscal cliff' of tax hikes and spending cuts worth 5% of U.S. GDP, the Eurozone crisis, China's slowdown and the ongoing pullback in corporate spending.

You can see this in the way technical indicators of market strength are breaking down, presaging additional stock market losses in the days to come -- weakness that could very well pop the newfound confidence of average Americans.

First, the good news. This morning the University of Michigan's consumer sentiment survey jumped to its highest level since the recession started, thanks to a big increase in the expectations component. As the chart above shows, there has been steady upward progress since last summer's financial scare surrounding the Standard & Poor's downgrade of the U.S. credit rating, due largely to a gridlocked political system.

There is a very real risk that Congress will similarly bungle the handling of the fiscal cliff later this year.

This is clearly part of the reason stocks have been sliding stealthily over the past few weeks. The Dow Jones Industrial Average, after retesting its September high, is now grasping for support near its 50-day moving average and closed below its lower Bollinger Band -- a measure of volatility -- for two consecutive days. That's a sign of significant technical weakness that hasn't been seen since the market meltdown in May.

There's more.

Cyclical, economically sensitive stocks are lagging defensive issues, measures of breadth (such as the percentage of NYSE stocks above their 50-day moving average) are breaking down, and upside volume (the percentage of daily volume going into rising issues) has been falling since early September.

So while it's great that people are feeling more optimistic, the behavior of both CEOs and Wall Street investors suggests the euphoria will be short lived.

For this reason, I continue to recommend that my newsletter subscribers and money management clients maintain a defensive, cash-heavy positioning after capturing a near 9% gain in September.

Positions include a short against industrial engine maker Cummins (CMI).

Disclosure: Anthony has recommended CMI short to his newsletter subscribers and money management clients.

Be sure to check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at anthony@edgeletter.c​om and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.