A 26 Year SPY Volatility Analysis Study, summarized.

I finished covering every daily 2% swing on the market since the year 2000. In the interest of not posting a massive wall of text, I've summarized "eras" of volatility and included key points of interest for each one. I did not use any AI when researching these days. if only because it's way too error prone. Hopefully, events of the past can shine a light on critical points to pay special attention to in the future. It was really cool to see just how much things have changed in only the past quarter century, the older stock market seemed much more fun before algos took over in the late 2000s.

If you have any questions about what happened in certain points, feel free to ask.

This pastebin has every single date and percentage change I used and every news article I sourced from. https://pastebin.com/njU8gDcy

Dotcom Bubble, 9/11 & Enron Panic:

The catalyst for the Dotcom crash came from extremely overvalued companies, and the selloffs continued due to earnings reports consistently disappointing. The FED played a very active role in managing the economy and caused a great amount of damage to the market. Despite trying to manage inflation and pushing rate hikes as late as May of 2000, by December of that same year, the FED was announcing planned rate cuts as a result of a worsening economy! In about half a year, the FED managed to muzzle a booming economy and contributed to its nosedive in record time. 9/11 came along and introduced a very high amount of fear & uncertainty into the market, with no shortage of concerns over additional terrorist attacks or new wars. What really sent the market to new lows were events related to the Enron scandal, which confirmed the worst fears of many investors, that companies were cooking their books throughout the period leading up to the Dotcom crash. Thanks to consistently poor earnings reports or earnings revisions, the selling continued, though after the market kept reaching new lows, sentiment seems to have changed for the positive. Volatility continued after this period, but the worst had come to pass.

Key Points of Interest

Overvalued Companies, high P/E ratios, Earnings reports, antitrust and SEC litigation, fraud investigations, FED comments and announcements

Bush Terms: Post-Dotcom and Pre-Recession

All things considered, the interim period between the Dotcom Bubble and Recession were fairly mild. 2004 and 2005 saw a complete break in volatile days, and the ones leading up to it were residual from the Dotcom bubble or related to the war in Iraq, which wrapped up quickly. 2006 had only one instance as well, as the bull market leading to eventual disaster seems to have been kicking off full throttle. It wasn’t until late 2007 that negative volatility returned, and by then, the writing was on the wall for one of the most severe downturns in recent history.

Key Points of Interest

Earnings reports, monitoring wars, state of credit markets and liquidity, FED announcements and comments, energy prices

2008 Financial Crisis, Housing Market Crash & Great Recession

The housing market crash played a huge role in the Great Recession, but it would be more accurate to view it as the first domino, rather than a singular cause. Much of the groundwork for the Great Recession was laid during the Dotcom Bubble, with growing interest in safe assets like real estate as the insane over-valuations of tech companies finally unwound. The rate cuts that helped the economy get over the bubble bursting made real estate investing even more accessible. Banks were more than happy to hand out mortgages like candy, without checking much into the solvency of their loan bearers. These careless practices turned into mass mortgage delinquencies. Leading into the next domino; selling stocks at the first sign of trouble. Huge banks began posting multi-billion-dollar losses, accelerating the flight out of the markets. Over-exposed trading firms began collapsing (leading to more stock sales to cover losses) and, ultimately, the largest domino, a credit/liquidity crunch. Now that banks were posting losses and losing funding (it was impossible to guess which bank could go under, safer to just run away) liquidity almost entirely dried up. Debt is the most essential cornerstone of the economy, without cheap loans expanding or maintaining business became almost impossible. So, companies did the most logical thing they could, start laying off workers to cut costs for lean times. This made matters much worse. The unemployment rate pushed 10% by the peak of the recession and the effects were obvious. Without jobs, many people tightened their purse strings, unable to participate in the economy. Foreclosures spiraled, home prices collapsed, and the same companies taking cost cutting measures were punished; no one to buy their products. Consistently terrible earnings reports dropped the market even further down and led to the collapse of many businesses. The most notable of which was the auto industry. Ford, Chrysler, and General Motors all teetered on the edge of bankruptcy, with only Ford escaping it. It didn’t help that these companies were notorious for making gas-guzzlers, during a time where crude peaked at $140 a barrel. Tens of thousands of layoffs came from this industry alone, but it's worth noting that this applied to just about every sector of the economy. To make matters even worse, a slowdown in America’s economy affected most of the developed economies across the globe, to varying degrees.

Things only improved thanks to near zero interest rates in order to reignite the liquidity market and multi-trillion, taxpayer sponsored, internationally coordinated, bailouts. There were plenty of talks about financial reform and nationalization of struggling banks around this time, but none of this came to pass. Sure, mortgages became harder to get and credit controls were introduced, but no one was really held accountable for any of the suffering brought about during the Recession. The only lesson here seems to be that you can do basically anything you want if the economy depends on you.

Key Points of Interest

Housing and Foreclosure numbers, earnings reports, Labor Department unemployment numbers, Manufacturing statistics, Announcements that the money printer has been activated (especially when the numbers are big), FED announcements and comments

Obama Terms 1 & 2, Post-Recession

The Great Recession left a very long-lasting impact on the global economy and despite America officially emerging out of it fairly quickly, the damage lasted for some years. Volatility continued throughout 2009, much for the same reasons it had earlier in the crisis; bad economic reports, missed earnings reports and persistent fears that “the bottom” had not yet come. In 2010, attempts to regulate banks by Obama and the severe economic weakness of multiple member states of the European Union caused constant stress (it can’t be overstated), but there were signs that the U.S. economy was on the mend, particularly housing prices. A slowdown in China’s booming economy also caused an undue amount of stress. Both the EU and the U.S. were forced to issue gigantic bailouts in order to keep their respective economies from collapsing. Mixed economic reports kept traders on their toes. Volatility had slowed down by 2012 & 2013, though some issues in Europe & China, occasional bad economic data, and political infighting between the Obama administration and Republicans kept things interesting. The FED began rolling back its aggressive buybacks that it had instituted to bail the country out during the recession. Concerns about the growth of the Chinese economy remerged and “the Greek problem” still remained unresolved for the EU as late as 2015.

Key Points of Interest

Economic Data: Unemployment numbers, Manufacturing statistics, Housing numbers, Consumer sentiment etc., earnings reports, Solvency of Eurozone members, Stimulus packages and the political conflict over these projects, Growth Numbers Associated with China, FED announcements and comments

Trump Term #1, Pre-COVID

Despite the overwhelming amount of downwards volatile days during Trump’s first term, the stock market performed rather well, until COVID. A large chunk of the volatile days can simply be attributed to tariffs, particularly against China, and the constant back & forth of near resolutions or reciprocal tariffs. Considering how crucial Chinese manufacturing was to so many American companies, the degree of stress and fallout from this conflict cannot be understated. Trump was also the first president to “weaponize” social media as a tool for moving markets, which started with Amazon as the first significant success. Open conflicts with the FED’s decision to hike rates in October of 2018 took place on Twitter, rather than in backrooms as they probably had been in the old days.

Key Points of Interest

Trump’s social media account, Government statements on Trump’s executive decisions, earnings reports, FED announcements and comments

COVID Crash

The COVID crash is better termed a flash crash, as the market was able to recover from it in a short period of time. For anyone following the market in those days, the perception of COVID shifted rapidly from "don't worry about it", then swung to "the world is ending" and, finally, "it isn't that bad". There isn’t too much to say about the panic caused by the virus or the implications of the global economy shutting down for a prolonged period of time; it was very real. For those who were able to keep their wits about them, the virus provided a generational opportunity for wealth generation. Those who shorted when markets collapsed, those who bought tech companies, vaccine producers, or energy at bargain prices made out like absolute gang busters. Ultimately, what saved markets from a complete meltdown was a blank check from central banks around the