The S&P/TSX Composite has broken its own recent volatility average in five of the last six trading sessions. That sounds like a market coming apart. It is not quite that, and the gap between what happened and what a client remembers happening is where the real work begins.
A Six-Day Run With Two Names Attached
The run started August 28, when the TSX fell 0.76% ahead of Washington's confirmation of 50% tariffs on roughly C$20 billion of Canadian goods. It continued through August 31, down 0.78%, and September 1, down 1.23%. Iran's attack on the Saudi-flagged tanker Sidr in the Strait of Hormuz, which killed two crew members, pushed oil back toward $100 a barrel and carried the index through two more outsized sessions: up 0.74% on September 2 and up 1.50% on September 3. Tuesday's retaliatory tariffs, which took effect at midnight against roughly $27.6 billion of U.S. goods, arrived on the calmest day of the six, a 0.33% decline.
The Availability Heuristic in a Six-Day Window
Amos Tversky and Daniel Kahneman named this mechanism the availability heuristic in 1973: people judge how likely something is by how easily examples come to mind, not by how often it actually happens. A tanker attack and a tariff announcement are vivid and easy to recall. A 0.26% gain on August 24 is not. When a client describes the market as chaotic lately, they are reporting an accurate count of the headlines they saw, not an accurate count of how the index moved.
The TSX's daily move has cleared its own three-week average of 0.49 percentage points in five of the last six sessions, a frequency worth naming on its own terms: the prior fourteen sessions cleared that same threshold only four times.
The 0.49 percentage point threshold is the 20-session average absolute daily move; five of the last six sessions exceeded it, against four of the prior fourteen. Source: TMX Group daily close data.
What the Selective Memory Leaves Out
Two of the five outsized sessions were gains. Kahneman and Tversky's loss aversion research, published in 1979, found that losses are weighted roughly twice as heavily as equivalent gains when people evaluate outcomes. A client holding a balanced portfolio through this stretch experienced two sharp down days, two sharp up days, and one quiet one. What they are likely to describe first, unprompted, is the down days.
None of this makes the last six sessions an illusion. The volatility is real, and the threshold it crossed is measured from the market's own recent behaviour, not an arbitrary line. What is selective is which half of that volatility gets remembered and which half gets discounted, and that selectivity is the actual subject worth addressing in the conversation that follows a week like this one.