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Here are some situations that might send you packing:
1. Your boss openly degrades your work and job knowledge in front of other employees although you have asked him privately not to.
2. Your boss has given you a workload that is beyond reasonability, exceeding all human limits. This problem is not a one-time project.
3. Extreme personality differences. This is a tough one. The boss reads your explanations as insubordination while you just want them to understand your reasoning.
4. Your boss continually changes policy in mid-stream making you look like the idiot.
5. Your boss is the final authority. As such there is nobody else you can take your concerns to.
6. Unfortunately, there are times when jealousy can be a factor. You might know more than your boss on the subject.
7. NO matter how hard you try, your boss feels you do everything wrong.
At this point, no doubt you have addressed your concerns with the appropriate party. However, if there are no legal issues, and nothing has changed, then consider changing jobs. If you are waking up with the dread of another day at work, then move on. Some situations no matter how hard you individually try will not change. Chalk it off as a learning experience, not a failure.
Mental abuse on a daily basis can wear heavily on your health. It may not be easy getting another job. What to do? Start applying and sending out resumes to other employers. Hang in as long as you can at your present job until you get another one. Develop patience and self-control to make it through the last of your bad-boss-scenario days.
Don't try and defend yourself. At this point it just doesn't work; you know you are a good worker. What else? If possible give your notice and leave the job with as little strained feelings as possible. Stay professional and keep your emotions in check. Remember, you will find the right fit. Stay positive. Your new job is just around the corner.