The stock market's wild flip flop Tuesday comes as some analysts see signs the rally is getting a bit overheated.
Laszlo Birinyi, longtime strategist and founder of Birinyi Associates, said earlier Tuesday that he sees clear signs the market is going into a period of consolidation, and he is currently not setting a target for the S&P 500, after it crossed his last one at 2,760.
Birinyi does not see this as a time to sit out of the market, but he says it could trade sideways for awhile.
"We like to be able to defend our targets," he said, adding he is holding off on a target until he sees the market shake out. "When we come up with a round number we use a trading range of the market, and that has served us very well. Right now, the market is at the upper end of the trading range. It's 5 percent over its 50-day moving average, and those are areas where the market tends to digest, consolidate, take a breather but not go down."
The S&P 500 and Dow both hit big round numbers in early trading Tuesday, with the S&P 500 crossing above 2,800 for the first time, and the Dow racing above 26,000. The Dow zipped from 25,000 to 26,000 in just seven trading days, its fastest 1,000 points ever.
But that was the morning. By afternoon, the market was in a mini panic attack, and stocks collapsed, turning the Dow's 283 point into a 100 point loss, before leveling off. It was the Dow's biggest intraday swing since Dec. 1. The Dow closed down 10 points Tuesday at 25,792, while the S&P fell 9 to 2,776.
The S&P 500 has been rising so quickly, it has already topped or matched some of the Wall Street analyst's year-end 2018 targets, collected by CNBC. The median target is currently 2,975 for year-end, about a 6 percent gain from current levels. The S&P 500, however, has already added 4 percent since Jan. 1.
Birinyi said the market experienced a similar period of consolidation in March, 2016, and at that point the market moved sideways for two months.