This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. The strong but stretched rally is undergoing its first little pullback at exactly the expected time and place. Two months in from the lows, up 18%, at an extremely wide spread above the 50-day moving average and precisely at the 200-day moving average at Tuesday's high, the S & P 500 is testing newly converted bulls' conviction. The trader textbook says a pullback to the early-June highs near 4,170 would be perfectly routine, as would a visit to the 20-day average 1% below that. That still-declining 200-day average is a key reason some insist it's premature to declare the bear market over, though by definition this only ever turns higher well after the market has moved pretty far off a low. I've noted several times that the stock market has not been able to hold firm when the 10-year Treasury yield has been at/above 3% this year (or in late 2018 the last time around), and it's pushed back above 2.9%. The 2-year yield is now tacking toward the multiyear highs too, rebuilding market pricing of at least another percentage point of Fed rate hikes ahead. This is ahead of the minutes from the Federal Reserve meeting a few weeks ago, which will almost surely strike a hawkish note with reminders that inflation is the sole enemy and that the committee will need persistent evidence that inflation is headed to the long-term target before considering a pause in tightening. That's all well and good, but this was also the message the last time, not far off the June lows in stocks, and it's exactly what the Fed has to say whether conditions are set to allow it to ease off the brake in coming months or not. Retail earnings are noisy but not all that freshly worrisome, with overall retail sales for July coming in OK ex-gasoline and ex-autos, slightly ahead of inflation but skewed more toward necessities. Bond yields (already up after a hot UK inflation number) rose and stocks weakened more following the retail-sales release, presumably because it might dim the odds slightly of the Fed going slower. The technical attributes of the rally have won over many converts to the bullish camp, with enough breadth/momentum signals to imply the recent lows are safe. It's a tougher case in the macro/fundamental work, though admittedly as Ned Davis Research's Ed Clissold says: "Macro looks terrible at the lows," historically speaking. BofA strategists show it would be unusual for a new bull market to have started with the "Rule of 20" sum of the S & P 500 P/E ratio and the CPI above 20. Of course, it was at/near 20 several times (early 2000s, late-'60s). But one interesting parallel example to know could be the late 1940s – with the post-war economy seeing massive inflation on supply constraints and enormous pent-up demand around 1946, which came own hard but didn't lead to a recession until 1949 – also when a new bull market started. Yet the stock market went essentially sideways from 1946-1949, not making significant new lows but staying in a range. It's just an interesting (if distant) precedent to keep in mind, if nothing else. Apple shares are riding some upbeat analyst calls to stay slightly green vs. a steep 1.6% drop in the Nasdaq 100 (of which AAPL represents a 13% weighting) and probably testing the stock's limits for stability in rougher waters. As noted recently, the stock is pretty much at a 15-year high in relative valuation vs. the S & P 500 — and at its highest-ever weighting in the benchmark at 7.3%. Meme-stock fever is on the one hand just typical muscle memory of prior fun exercises of the past couple years in a market that's rebuilding risk tolerances. On the other hand, it's a slightly unwelcome burst of unstable energy in a market trying to prove it's on the upswing. Market breadth is quite weak, with more than 80% downside volume, a broad give-back of recently stellar breadth. Credit is softening from a good run of firmer performance, but it's still OK in broad terms. The Cboe Volatility Index (VIX) barely above 20, no alarms being sounded here, will take a more pronounced setback than this to get folks paying up for hedges in August.