Tuesday was a make-of-it-what-you-will session.

The bullish spin was that the declines for major averages were relatively modest and trading volume was fairly subdued, despite a host of potential destabilizing developments. The bearish spin is that major averages failed to sustain a midday rally attempt in perhaps the first sign "dip buyers" are running out of ammunition.

In a microcosm of this something-for-everyone day, Internet leaders Yahoo! ( YHOO), Amazon.com ( AMZN) and eBay ( EBAY) continued their recent ascent. Bears said that was more proof of rampant speculation, while bulls cheered the ongoing momentum in/enthusiasm for these names.

The final conclusions from the session remain to be determined. But the contrasting viewpoints were evinced by intraday machinations for major averages.

At day's end, the Dow Jones Industrial Average was down 0.5% to 8679.25 after trading as high as 8723.29 around 1:15 p.m. EDT and as low as 8647.60 at around 2:30 p.m. The S&P 500 closed down 0.3% to 942.30 vs. its intraday high of 947.51 and low of 938.91, while the Nasdaq Composite slid 0.1% to 1539.70 vs. its apex of 1548.60 and nadir of 1529.60.

Catalysts cited for the decline included renewed concerns about terrorism following the deadly attacks in Saudi Arabia; more unnerving comments by Treasury Secretary John Snow; an expanding trade deficit; disappointing revenues at Wal-Mart ( WMT); and a Merrill Lynch downgrade of several semiconductor names.

Intersil ( ISIL) and Maxim Integrated ( MXIM) each fell about 3% following the Merrill downgrade, which cited valuation concerns and helped push the Philadelphia Stock Exchange Semiconductor Index down 0.8%.

On a more upbeat note, traders cheered the three-way deal between Avanex ( AVNX), Corning ( GLW) and Alcatel ( ALA). Avanex soared 146% after what was heralded as the beginning of some much-needed consolidation in the fiber optics sector.

More generally, bulls were heartened by the market's midmorning rally and relatively tepid setback.

In so-called other markets, the price of the benchmark 10-year Treasury rose 8/32 to 100 4/32, its yield falling to 3.61%. The dollar was mixed, falling to 116.60 yen vs. 117.03 Monday but the euro declined to $1.1518 vs. $1.1543 the prior day.

However, the greenback finished uniformly lower vs. overnight trading levels of 117.55 yen and the euro at $1.1464, weakened in New York after Bloomberg published an interview with Snow that took place Friday but had been embargoed until Tuesday.

"As a general rule, we'd prefer to see interventions kept to a minimum," Snow said, further adding: "The value of the currency in most instances is best set, as a general rule, through the operation of competitive international currency exchanges."

Snow later reiterated the "strong-dollar" slogan but the sum of his recent comments reflects "a new era in the Administration's strong dollar policy -- one of benign neglect," according to Korman Tam, a currency analyst at MG Financial Group.

Rather than being used to express confidence in the dollar or to tacitly imply the threat of intervention, the strong-dollar mantra is now "simply used to slow down the pace of the dollar's decline," Tam suggested.

One presumed benefit of a weaker dollar is that it helps U.S. exports, which rose 0.6% to $82.3 billion in the March trade deficit report. Nevertheless, the overall deficit widened to $43.5 billion, the second-largest ever and wider than consensus forecasts of $41 billion.

Bears Fight Upward Tide, Bide Time

A rising trade deficit, a weakening dollar, stretched valuations, runaway speculation, too much optimism and flagging fundamentals are just some factors skeptics cite to decry the stock market's recent advance.

"It's hard to believe, but the gap between perception and reality is worse today than during any one of the failed sucker's rallies of the past three years," opined Fred Hickey in the May issue of The High-Tech Strategist. "While the bullmeisters spin tales of another second-half rebound that won't occur, the current reality is quite different, with demand sinking while supplies are mushrooming."

As another source quipped: "Anyone buying stocks here is betting on a second-half recovery in the second quarter."

Nevertheless, and Tuesday's setback aside, some can't help but wonder what's going to stop the market's upward momentum (presuming it's going to be stopped).

"You don't have to have an event," suggested Scott Curtis, head of U.S. equity trading at Credit Lyonnais. "Sometimes just the mechanics of the marketplace becomes self-fulfilling and you run out of steam. You see sellers coming out at certain levels, looking to take profits, and the virtuous circle ends."

While stressing he is "not a bear," Curtis observed major averages are running into technical resistance levels. Most notable among these is the area between 950 and 965 for the S&P 500. As discussed here , some market participants believe all the "new bull market" talk is just folly until the S&P breaks above its August highs of 965, preferably on rising volume. In other words, what's transpired since mid-March is merely a robust trading-range rally within the confines of a bear market until proven otherwise.

"The market is fairly resilient but there's a lot of complacency out there," Curtis continued, noting the put/call ratio fell to 0.65 from 0.76 Monday while the CBOE Market Volatility Index continues to meander near 52-week lows. (The VIX rose 2.8% to 22.03 Tuesday after trading as low as 21.57 intraday.)

Last year the VIX traded under 25 from mid-May until early June, the trader recalled. "Sometimes it stays overextended for a while, but last summer ended up being a two-month move into the October lows," he said. "We could have the same thing again."

Unless, of course, everything really is different and better this time.
Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to Aaron L. Task.