Meisler: We've Seen Volatility Like This Before

Editor's note: This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers.

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I've seen so many comparisons to the 1930s as well as to the Crash of 1987 in the past week or so that I'm sure there must be some comparisons to be made. But I had this recollection that the moves we saw after the tech bubble burst in 2000 were just as wild as we have seen now. Yet no one was discussing this.

So naturally I went back and looked. In early April 2000, Nasdaq actually lost -- get this --27% in five trading days. This time around, while no consolation I'm sure, it took about seven trading days to do the same sort of damage.

Now check this out. After that slide in five days, Nasdaq rallied 20% over the next two trading days. Does this sound familiar? The next two days after that? The market was down to the tune of 12%. And then? Up 18% over the next six trading days.

I don't know about you, but boy, it looks to me as though we have seen volatility like this before, or at least something close to it. The difference is that the moves in the S&P 500 weren't as violent. But we have seen this violence before, only it was in Nasdaq. Everyone says things are more sped up now for some reason. I don't know about you, but it looked pretty sped up to me in the spring of 2000.

I've boxed off the time period discussed on the chart so you can see the wild swings for yourself. And you can see it all eventually led to a tradable rally (indicated on the chart with an arrow).

As part of this exercise, I went back and read the headlines from those days in mid-April 2000. The first thing that caught my eye was a headline from this Web site on the day following the two-day 20% rally: "Volatility Worries Return to Wall Street, Sending Indices Down."

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