Monthly Drawdown Report: July 2026

DrawdownAlerts Monthly Drawdown Report: July 2026

1. Opening

We present the DrawdownAlerts Monthly Drawdown Report for July 2026. Our data engine tracked a total of 876 assets this month, revealing a highly fractured market landscape. While some sectors show resilience, a massive undercurrent of volatility is pushing hundreds of individual equities into deep distress. We observe unprecedented rotational velocity as stocks cross critical risk thresholds at a rapid pace.

To navigate this environment, market participants must look beyond simple index averages. Our platform focuses on the depth and duration of drawdowns to reveal the true state of individual equities. This month's data highlights a market characterized by extreme divergence rather than uniform movement. We will unpack these trends to show where risk is concentrating and where it is dissipating.

2. Monthly Summary

Our platform tracks the health of the market by sorting assets into three distinct risk categories based on their peak-to-trough declines and drawdown durations. In July 2026, our database tracked exactly 876 assets. The distribution reveals that the red zone, which represents the highest risk tier, contains 385 assets, or 43.9% of the total tracked universe. This high concentration of deeply damaged stocks highlights the persistent pressure facing modern equities.

Conversely, the green zone contains 272 assets, which represents 31.1% of our tracked universe. These green zone assets remain near their historical highs or have recovered quickly from temporary pullbacks. The remaining 219 assets sit in the yellow zone, representing 25.0% of the market. This yellow zone serves as a transitional buffer, signaling moderate stress that could easily worsen.

Across all 876 tracked assets, the average severity score reached 5.3 this month. We calculate this proprietary metric by combining the depth of an asset's drawdown with the total number of days it has spent recovering. An average score of 5.3 indicates that the typical equity in our database is experiencing sustained, long-term capital impairment rather than a brief, shallow correction. This baseline score helps us evaluate whether the market is entering a phase of systemic recovery or deeper distress.

3. Zone Movement

The most striking feature of our July 2026 data is the extreme volume of transition activity between zones. During the month, 295 stocks entered the red zone, marking a sharp deterioration in their price structures. At the same time, 255 stocks managed to exit the red zone, reflecting localized relief rallies or corporate restructuring events. This high volume of entries and exits shows that market participants are rapidly reallocating capital across different risk profiles.

In addition to these red zone movements, 418 stocks entered the yellow zone this month. This massive influx of assets into the yellow zone indicates that a broad swath of the market is beginning to show early signs of technical damage. We view this influx as a leading indicator of potential market-wide instability in the coming months. If these yellow zone stocks continue to decay, they will soon push the average severity score well past the current 5.3 level.

The simultaneous movement of hundreds of stocks across different zones points to a highly active, rotational environment. Corporate earnings announcements and shifting macroeconomic expectations drove much of this volatility throughout July. We expect this high-velocity churn to continue as individual companies face distinct operational headwind patterns. This churn demonstrates that broad market indexes often mask the intense volatility occurring at the individual equity level.

4. Top Severity Scores

We now examine the most severe drawdown profiles in our entire database of 876 assets. At the very top of our list sits Wheels Up Experience Inc. (ticker: UP), which carries an extreme severity score of 22.1. The stock has suffered a devastating decline of -99.8% from its peak. This historic drawdown has persisted for 1837 days, representing a multi-year period of severe capital destruction.

In the second position, we find enCore Energy Corp. (ticker: EU) with a severity score of 21.0. This asset has declined by -88.1% from its historical peak. The most remarkable aspect of this profile is its duration, as the drawdown has now lasted for 5647 days. This incredibly long recovery timeline heavily weights the severity score, demonstrating how time can compound the impact of capital loss.

Nano Dimension Ltd. (ticker: NNDM) occupies the third spot with a severity score of 19.6. The company is currently down -98.3% from its peak. This severe drawdown has dragged on for 3777 days without a meaningful recovery. The combination of a near-total price collapse and a decade-long duration cements NNDM as one of the most damaged assets in our system.

We also track American International Group, Inc. (ticker: AIG), which registers a severity score of 18.8. AIG is down -93.6% from its peak, and this drawdown has persisted for a staggering 9357 days. This extreme duration reflects the long-term legacy of historical financial crises on corporate capital structures. It serves as a reminder that some drawdowns require decades to resolve, if they resolve at all.

Charter Communications, Inc. (ticker: CHTR) follows with a severity score of 18.3, down -82.3% over 1787 days. EPAM Systems, Inc. (ticker: EPAM) shows a severity score of 18.2, down -85.3% over 1719 days. PayPal Holdings, Inc. (ticker: PYPL) exhibits a severity score of 17.9, down -81.5% over 1826 days. PG&E Corporation (ticker: PCG) matches that severity score of 17.9, down -75.3% over 3239 days.

Rounding out the top ten, we find Marubeni Corporation (ticker: MARUY) with a severity score of 17.8. MARUY is down -92.1% from its peak, but has reached this state in just 164 days, indicating a remarkably rapid collapse. Finally, Paramount Skydance Corporation (ticker: PSKY) carries a severity score of 17.8, down -91.1% over 1951 days. Both of these assets demonstrate how quickly capital can evaporate when market conditions shift.

These top ten assets represent the absolute extreme of capital destruction in our database. Their high severity scores are not merely a function of deep percentage drops, but are heavily driven by the long duration of their drawdowns. When an asset remains in a drawdown for thousands of days, it indicates that the company's previous peak may have been an unsustainable anomaly. We use these extreme profiles to calibrate our risk models and define the upper boundaries of our severity scale.

5. Approaching the Red Zone

We also monitor the assets that are currently hovering just outside the red zone, specifically those with severity scores between 4.0 and 5.0. These stocks represent the next potential wave of deeply distressed assets. Currently, four prominent companies sit exactly at the critical threshold of 5.0, including Abbott Laboratories (ticker: ABT), Avery Dennison Corporation (ticker: AVY), Applied Materials, Inc. (ticker: AMAT), and Martin Marietta Materials, Inc. (ticker: MLM). Each of these four assets carries a severity score of exactly 5.0, placing them on the absolute precipice of the red zone.

Just behind this group, we find Xylem Inc. (ticker: XYL) with a severity score of 4.9. These five companies span diverse industries, from healthcare and materials to semiconductor equipment and industrial infrastructure. The presence of these major blue-chip names at or near a 5.0 severity score indicates that market stress is no longer confined to speculative or low-quality stocks. We will watch these specific assets closely in August to see if they cross into the red zone or find support.

The behavior of these large-cap stocks provides critical clues about the broader economy. When companies like Abbott Laboratories and Applied Materials face mounting drawdown pressure, it suggests that institutional investors are reducing exposure to high-quality names. This pattern often precedes a broader market correction, as capital exits defensive and growth leaders alike. We track these border-zone assets to give our users early warning of shifting institutional sentiment.

6. Sector Patterns

Our July 2026 data reveals clear, distinct patterns of stress across different sectors of the economy. The technology and fintech sectors continue to show deep scars, as evidenced by the high severity scores of EPAM Systems, Inc. (18.2 severity) and PayPal Holdings, Inc. (17.9 severity). These companies have struggled to recover from post-pandemic peaks, leaving long-term investors with sustained paper losses. The semiconductor industry also faces mounting pressure, highlighted by Applied Materials, Inc. sitting at a 5.0 severity score.

The telecommunications and media sectors represent another major area of concern in our database. Charter Communications, Inc. (18.3 severity) and Paramount Skydance Corporation (17.8 severity) illustrate the ongoing structural challenges facing traditional media distribution models. These high severity scores reflect years of steady operational decline rather than sudden, unexpected shocks. The persistent weakness in this sector suggests that systemic changes are rewriting the rules of media consumption.

In contrast, we observe that defensive sectors and industrial materials show a more bifurcated pattern. While Martin Marietta Materials, Inc. (5.0 severity) and Avery Dennison Corporation (5.0 severity) are approaching the red zone, many other industrial assets remain firmly in the green zone. This divergence suggests that market participants are highly selective, penalizing specific companies while supporting others within the same broad sector. This selective behavior highlights the importance of individual asset tracking over broad sector assumptions.

We also note persistent distress in the utility and energy sectors. PG&E Corporation (ticker: PCG) maintains a severity score of 17.9, showing that infrastructure challenges continue to weigh on long-term performance. Meanwhile, enCore Energy Corp. (ticker: EU) carries a 21.0 severity score, reflecting the extreme volatility and long recovery cycles inherent in the nuclear energy resource sector. These cases demonstrate that capital-intensive industries often face prolonged recovery timelines.

7. Month-Over-Month Trend

When we compare July 2026 to previous periods, we see a market in the middle of a massive structural transition. The average severity score of 5.3 indicates a moderate but persistent level of systemic stress. However, this average score hides the massive underlying churn that we documented this month. The fact that 295 stocks entered the red zone while 255 exited shows that the market is not experiencing a uniform decline.

Instead, we are witnessing a rapid rotation where some companies find solid footing while others collapse into severe drawdowns. The entry of 418 stocks into the yellow zone is the most concerning trend we observed in July. This large-scale migration into the yellow zone suggests that the overall market health is deteriorating under the surface. If these yellow zone stocks do not stabilize, the average severity score will likely climb higher in the coming months.

We also note that the duration of drawdowns is becoming a dominant factor in our severity calculations. Many of our top ten highest severity assets, such as American International Group, Inc. (9357 days) and enCore Energy Corp. (5647 days), have spent years in deep drawdowns. The sheer length of these recovery timelines shows how difficult it is for companies to repair their capital structures once they experience a catastrophic decline. This reality underscores the value of tracking drawdown duration alongside simple percentage declines.

8. What to Watch in August

As we look ahead to August 2026, our analytical focus remains squarely on the transition metrics. We will closely monitor the 418 stocks that recently entered the yellow zone to see if they deteriorate further or return to the green zone. Their trajectory will determine whether the broader market experiences a systemic decline or a successful stabilization.

We will also track the five key assets hovering at the red zone boundary: Abbott Laboratories (5.0), Avery Dennison Corporation (5.0), Applied Materials, Inc. (5.0), Martin Marietta Materials, Inc. (5.0), and Xylem Inc. (4.9). If these prominent companies cross the 5.0 threshold, it will signal that deeper structural damage is spreading into high-quality, large-cap sectors. We invite our subscribers to track these developments in real time through our interactive dashboard.

Finally, we will watch for any shifts in the average severity score of 5.3. A rising average score will confirm that the market's internal health is worsening, even if major indices remain flat. Conversely, a falling average score will signal that the 255 red zone exits are starting to outpace new entries, indicating a broad-based recovery. We will continue to deliver objective, data-driven updates as these trends unfold.