My explanation for dropping a hanging slinky:
The contraction force (the spring attraction) in a slinky is like a resistance and is retarding the travel of kinetic information from the top of the slinky to its bottom. The point of change is at the top because that is where the state change begins (we drop it). The top of the slinky is falling faster than the rate of free fall because it’s rate of downward motion is amplified by its inward (and in this case, vertical) contraction forces. The bottom of the slinky does not move because the contraction force is retarding and outrunning the free fall force and kinetic information, therefore the bottom acts unaware it was let go at the top. This effect happens to such a degree that the top of the slinky, and other parts below, race downward to impact the bottom of the slinky in a surprising fashion. This occurrence often causes much debate.
Remember: The slinky is not stretched out in a uniform manner because the top is supporting more weight than the parts of the slinky at the bottom, so the contraction forces are off-center and concentrated at the top, and they are variable. This causes: a great deal of added acceleration downward at the top, while entirely nullifying the upward attraction at the bottom, and the bottom also holds in equilibrium against the downward gravity force until it is impacted by the slinky parts above. Again, the contraction force is amplified at the top because it is stretched out more than it is at the bottom.
-Jeremy Edward Dion
Check out this slinky experiment in action: