Monthly Drawdown Report: August 2026

DrawdownAlerts Monthly Drawdown Report: August 2026

1. Opening

We present the DrawdownAlerts Monthly Drawdown Report for August 2026. Our proprietary tracking system monitors 909 assets to evaluate the depth, duration, and severity of market drawdowns. This month, we observe a significant redistribution of risk across our entire coverage universe. Capital migration has accelerated, leaving clear footprints in our trend data.

The overall market shows a complex picture of stabilization mixed with emerging risk. While some legacy assets continue to languish in multi-year drawdowns, a massive wave of new assets has entered our warning zones. We see this dual dynamic as the defining feature of the current market landscape.

2. Monthly Summary

Our data reveals a market divided into distinct risk segments. Out of the 909 total tracked assets, 385 assets now reside in the red zone, representing 42.4% of our coverage. The yellow zone contains 273 assets, which accounts for exactly 30.0% of the total. Meanwhile, the green zone holds the remaining 251 assets, representing 27.6% of the monitored universe.

The overall average severity score across all 909 assets stands at 5.3. This average score indicates a moderate level of systemic stress, but it masks deeper movements within individual sectors. The high concentration of assets in the red and yellow zones shows that a combined 72.4% of tracked equities are experiencing notable drawdowns.

The green zone remains the smallest segment of our coverage at 27.6%. This distribution indicates that less than a third of the tracked universe is trading near peak historical levels. The heavy skew toward the red and yellow zones emphasizes the persistent nature of the current market drawdown.

3. Zone Movement

August 2026 witnessed intense churn within our risk categories. A total of 245 stocks entered the red zone this month, signaling a rapid deterioration in their price structures. Conversely, 247 stocks managed to exit the red zone, indicating either a stabilization of price or a technical recovery. This near-equilibrium suggests that while some areas of the market are finding a floor, an almost equal volume of equities is falling into deep distress.

Perhaps the most striking data point is the movement into the yellow zone. We recorded 401 stocks entering the yellow zone during August. This massive influx represents a significant wave of secondary stress washing across the market. These assets are transitioning from relative stability into active drawdowns, creating a massive pipeline of potential red zone candidates for the coming months.

This high volume of transition highlights the volatile nature of the current market environment. We track these movements to understand how quickly risk spreads through different asset classes. The high number of yellow zone entrants suggests that market-wide pressure is expanding rather than contracting.

The near-parity between red zone entries and exits shows that the market is churning its most distressed assets. While 247 stocks escaped the worst-performing category, the 245 new entrants quickly replaced them. This constant rotation prevents the red zone from shrinking in a meaningful way.

4. Top Severity Scores

Our severity score combines both the depth of a drawdown and its duration to measure the true level of asset distress. This metric allows us to compare short-term, violent price drops with long-term, grinding declines. This month, several legacy and modern assets continue to register extreme severity scores. We have highlighted the ten most severe situations in our database.

At the absolute top of our list is Wheels Up Experience Inc. (UP), which carries a severity score of 22.1. This asset has suffered a devastating drawdown of -99.8% over a period of 1858 days. This represents a near-total loss of equity value that has persisted for over five years. The prolonged nature of this drawdown makes recovery exceptionally difficult.

In second place, enCore Energy Corp. (EU) exhibits a severity score of 20.6. This stock is currently down -86.4% from its peak, and this drawdown has lasted for an astonishing 5668 days. This duration of over fifteen years highlights a structural, long-term impairment that spans multiple market cycles.

Nano Dimension Ltd. (NNDM) ranks third with a severity score of 19.6. The asset is down -98.2% over a duration of 3798 days. This ten-year drawdown reflects a persistent downward trend that has failed to find a meaningful reversal.

PG&E Corporation (PCG) holds the fourth spot with a severity score of 19.3. PCG is down -81.2% over a period of 3260 days. This utility giant has spent nearly nine years in a deep drawdown, driven by systemic operational and environmental challenges.

American International Group, Inc. (AIG) sits at fifth with a severity score of 18.9. AIG is down -93.8% over a staggering 9378 days. This duration of more than twenty-five years is the longest among our top ten highest severity assets. It serves as a stark reminder of the permanent scars left by historical financial crises.

PayPal Holdings, Inc. (PYPL) registered a severity score of 18.2, with a price drawdown of -82.9% lasting 1847 days. This five-year drawdown highlights the ongoing struggles within the digital payments sector. Once a market leader, PYPL has struggled to regain its peak price levels.

Charter Communications, Inc. (CHTR) shows a severity score of 18.1, down -81.4% over 1808 days. This cable and broadband provider has faced consistent downward pressure for nearly five years. The duration of this drawdown reflects broader structural shifts in the media and telecommunications landscape.

Marubeni Corporation (MARUY) recorded a severity score of 17.9, down -92.5% over a relatively short period of 185 days. This rapid descent makes MARUY unique among our top ten list. The extreme velocity of this drawdown has driven its severity score up quickly, despite the short duration.

EPAM Systems, Inc. (EPAM) also carries a severity score of 17.9, down -83.6% over 1740 days. This IT services provider has spent nearly five years in a severe drawdown. The persistence of this decline highlights the broader headwinds facing global technology consulting firms.

Lufax Holding Ltd (LU) rounds out our top ten list with a severity score of 17.1. LU is down -95.7% over 2097 days. This financial technology platform has experienced a prolonged and deep drawdown of nearly six years. The asset continues to struggle to find a stable price floor in a challenging regulatory environment.

5. Approaching the Red Zone

We also track assets that are currently in the yellow zone but are rapidly approaching the red zone threshold. We define this critical transition phase as a severity score between 4.0 and 5.0. Several high-profile assets are currently hovering at the very top of this range. These borderline cases often serve as leading indicators for broader market trends.

Blackstone Inc. (BX) currently carries a severity score of 5.0, placing it on the absolute boundary of the red zone. Spotify Technology S.A. (SPOT) also sits at a severity score of 5.0, reflecting growing price pressure over recent months. DaVita Inc. (DVA) is the third asset resting exactly at a severity score of 5.0. These three major corporations are poised to enter the red zone if their current drawdowns deepen by even a fraction.

Just below them, Cognizant Technology Solutions (CTSH) holds a severity score of 4.9. Caterpillar Inc. (CAT) also stands at a severity score of 4.9, indicating that industrial giants are not immune to the expanding market stress. The presence of these large-cap, highly liquid stocks at the edge of the red zone is a highly significant development. It suggests that the drawdown pressure is no longer confined to speculative or historically distressed assets.

If these five assets cross into the red zone next month, it will signal a broadening of market distress into the core of the financial, industrial, and technology sectors. We will monitor their daily price movements closely to see if they can find support or if they will join the 385 assets currently in the red zone. The transition of these major corporations into the red zone would likely elevate the overall average severity score of our coverage universe.

6. Sector Patterns

By analyzing our top severity list and the assets approaching the red zone, we can identify clear sector-specific patterns. The financial sector exhibits a dual narrative of legacy distress and emerging pressure. Legacy financial giant AIG remains locked in its decades-long drawdown, while modern asset manager Blackstone (BX) sits on the precipice of the red zone with a severity score of 5.0. This indicates that both historical and current financial structures are facing distinct forms of stress.

The technology and software sectors also show widespread vulnerability. Fintech pioneer PayPal (PYPL) and IT services giant EPAM Systems (EPAM) both carry severity scores near 18.0, reflecting deep, multi-year drawdowns. This trend is further supported by Cognizant (CTSH) hovering at a severity score of 4.9. These data points suggest that the broader technology services sector is experiencing a prolonged period of structural adjustment.

Industrial and utility sectors are also showing signs of increasing strain. PG&E Corporation (PCG) represents long-term utility distress with its 19.3 severity score, while Caterpillar (CAT) represents emerging industrial pressure at a 4.9 severity score. The inclusion of CAT in our high-risk watch list suggests that global economic headwinds are beginning to impact heavy machinery and manufacturing. We view this as a potential warning sign for the broader industrial economy.

Finally, the communications and consumer services sectors are heavily impacted. Charter Communications (CHTR) highlights the persistent decay in traditional cable models, while Spotify (SPOT) shows that even modern streaming platforms are facing severe price pressure. The wide distribution of these high-severity scores across diverse sectors indicates that the current market stress is systemic rather than isolated. We will continue to monitor these sector trends to see if any industry can establish a sustained recovery.

7. Month-Over-Month Trend

To understand the direction of the market, we must analyze the month-over-month trend of our distribution data. The net change in red zone assets was almost flat, with 247 assets exiting and 245 assets entering. This suggests a temporary stabilization at the very bottom of the market, as some deeply depressed assets find a cyclical floor. Symmetrical churn of this nature often occurs during periods of market consolidation.

However, the massive influx of 401 stocks into the yellow zone tells a very different story. This surge of new entrants into the yellow zone indicates that a fresh wave of drawdowns is beginning to take shape. It shows that while the most extreme distress (the red zone) is holding steady, the mid-tier risk category (the yellow zone) is expanding rapidly. This suggests that overall market stress is actually increasing, despite the flat net change in the red zone.

The average severity score of 5.3 will serve as our primary benchmark going forward. If the 401 stocks that entered the yellow zone this month continue to deteriorate, we will see the average severity score rise significantly in the coming months. The current trend suggests we are in the early stages of a broader market transition, where risk is expanding into previously stable assets. We must watch the rate of transition from yellow to red to confirm this trend.

8. What to Watch in September

As we move into September, our primary focus will be on the behavior of the 401 stocks that recently entered the yellow zone. We need to determine if these assets will stabilize and return to the green zone, or if they will continue their descent. A mass migration from the yellow zone to the red zone would signal a severe escalation of market-wide risk. We will track these transitions daily to capture early warning signs.

We will also closely monitor the borderline assets, particularly Blackstone (BX), Spotify (SPOT), and Caterpillar (CAT). If these high-profile stocks cross the 5.0 severity threshold, it will likely drag down sentiment across their respective sectors. Their performance will serve as a bellwether for the health of large-cap equities. A failure to hold their current support levels could trigger broader institutional selling.

Finally, we will track the average severity score of 5.3 to see if systemic stress is intensifying. Any upward movement in this average will confirm that the broad-based drawdowns we observed in August are consolidating into deeper, more permanent losses. We will continue to provide objective, data-driven updates as these trends unfold. Our platform remains dedicated to mapping these complex risk patterns across the global market.