Most bikes should have no more then 1 inch of movement while you are sitting on it! So if you push up on the chain and it goes up 1 inch then it will go down 1 inch also making your total movement 2 inches. This is bad!
Agreed, the chain should move 1/2 inch from the center line of chain travel. Moving a total of 1 inch...your's moving 2 inches is bad and you really need to adjust your tension. Make sure you get the alignment spot on (measure it out) when adjusting or you'll introduce other problems.