Monthly Drawdown Report: September 2026

DrawdownAlerts Monthly Drawdown Report: September 2026

Welcome to the DrawdownAlerts Monthly Drawdown Report for September 2026. This month, our data reveals an undeniable trend of deepening market distress across our entire coverage universe. We are witnessing a structural migration of assets away from peak health and into prolonged states of decline. This comprehensive report dissects these movements to expose the pockets of the market experiencing the most severe distress.

Our primary metric, the severity score, combines the percentage decline from an asset's peak with the total duration of that decline. By analyzing both depth and duration, we provide a clearer picture of market health than simple price tracking. This month's data suggests that the market is experiencing a significant escalation in systemic risk. We will explore these developments in detail throughout the following sections.

1. Monthly Summary

We currently track 938 assets across our platform. In September 2026, the distribution of these assets across our three risk zones highlights a highly stressed market environment. Specifically, 433 assets now reside in the red zone, which represents 46.2% of our total tracked universe. The yellow zone, our intermediate warning category, contains 316 assets, accounting for 33.7% of the total.

This leaves only 189 assets in the green zone, representing a modest 20.1% of the database. The average severity score across all 938 tracked assets has reached 5.9, reflecting a broad-based expansion of market pain. These metrics show that nearly half of the market is experiencing deep, persistent drawdowns. The high concentration in the red and yellow zones indicates that very few assets have escaped the prevailing downward pressure.

We view this distribution as a clear signal of systematic weakness across multiple asset classes. Healthy assets are becoming increasingly rare as more companies succumb to prolonged drawdowns. This high average severity score of 5.9 suggests that the current correction is not a minor pullback. Instead, we are observing a deep and durable contraction across our entire coverage list.

2. Zone Movement

The transition of assets between zones this month confirms that market stress is actively compounding. During September 2026, a total of 238 stocks entered the red zone. This influx indicates that a large cohort of assets saw their drawdowns deepen or their recovery timelines stretch past critical thresholds. At the same time, 173 stocks managed to exit the red zone.

While this exit activity offers a glimmer of hope, it was heavily outweighed by the incoming volume of distressed assets. Furthermore, 388 stocks entered the yellow zone this month. This massive migration into the yellow zone suggests that a wave of fresh drawdowns is currently developing. These assets have moved out of the healthy green zone, signaling the early stages of potential long-term damage.

We analyze these movements to understand whether market stress is localized or systemic. The sheer volume of stocks entering the yellow and red zones points to a systemic deterioration. We must watch these transitions closely, as they serve as leading indicators for the overall health of the market in the coming quarters. The net positive flow into distressed categories suggests that the broader market has not yet found a bottom.

3. Top Severity Scores

To understand the absolute extremes of this market, we look at the ten highest severity scores in our database. These assets represent the most severe combinations of price destruction and prolonged duration. At the absolute peak of distress is Wheels Up Experience Inc. (UP), which carries a severity score of 22.2. This asset has suffered a devastating decline of -99.9% from its peak.

Furthermore, this drawdown has persisted for 1879 days, meaning the asset has been in a continuous state of decline for over five years. Such an extreme combination of near-total value loss and multi-year duration makes UP the most distressed asset in our tracked universe. Following closely is enCore Energy Corp. (EU), which registers a severity score of 21.1. While its price decline of -88.2% is slightly less severe than UP, its duration is truly extraordinary.

EU has remained in its drawdown for 5689 days, a period spanning more than fifteen years. This extreme duration heavily weights its severity score, proving that time can be just as damaging as percentage depth. In third place, we find PG&E Corporation (PCG) with a severity score of 19.6. PCG has spent 3281 days in its drawdown and remains down -82.6% from its previous high.

This lengthy period of distress reflects long-term structural struggles that continue to weigh on the asset. Tied with PCG is Nano Dimension Ltd. (NNDM), which also carries a severity score of 19.6. NNDM has spent 3819 days in its drawdown and is currently down -98.2% from its peak. The asset has failed to mount any sustained recovery over more than a decade of trading.

Charter Communications, Inc. (CHTR) ranks fifth on our list with a severity score of 19.2. CHTR is down -86.5% from its peak, and this drawdown has now lasted for 1829 days. This represents a sustained five-year downward trend for the major telecommunications provider. Next, American International Group, Inc. (AIG) displays a severity score of 18.9.

AIG has spent a staggering 9399 days in its drawdown, the longest duration of any asset in our top ten. It remains down -94.0% from its peak, showing that some assets carry scars that last for decades. PayPal Holdings, Inc. (PYPL) sits in the seventh position with a severity score of 18.3. PYPL is down -83.0% from its peak, and its drawdown has persisted for 1868 days.

This highlights the ongoing struggles within the digital payments space over the last five years. EPAM Systems, Inc. (EPAM) follows with a severity score of 18.2. EPAM has spent 1761 days in its drawdown and is currently down -84.9%. In ninth place, Marubeni Corporation (MARUY) presents a unique case with a severity score of 17.9.

MARUY has been in its drawdown for only 206 days, yet its severity is incredibly high due to a rapid -92.5% collapse. This demonstrates that an extremely rapid, deep crash can generate high severity even in a short timeframe. Rounding out our top ten is Zoetis Inc. (ZTS), which carries a severity score of 17.7. ZTS has spent 1710 days in its drawdown and is currently down -70.6% from its peak.

These ten assets illustrate the diverse paths to extreme severity, whether through rapid crashes or decades of slow decline. We track these extreme cases because they reveal the absolute limits of market distress. They also serve as a reminder of how long an asset can remain impaired once it enters a deep drawdown. We will continue to monitor these names to see if they can ever begin the long road to recovery.

4. Approaching the Red Zone

While the top ten assets represent historical extremes, we must also look at assets currently on the verge of deep distress. Specifically, we monitor assets with severity scores approaching the red zone threshold. This month, we are tracking five prominent assets that sit at a severity score of exactly 5.0. These assets are Danaher Corporation (DHR), DoorDash, Inc. (DASH), Uber Technologies, Inc. (UBER), Royal Caribbean Cruises Ltd. (RCL), and Gulf Resources, Inc. (GF).

A severity score of 5.0 represents a critical transition point in our methodology. It indicates that an asset's drawdown is no longer a minor, short-term pullback. Instead, these assets are beginning to show signs of structural, long-term weakness. Danaher (DHR) has faced persistent downward pressure, pushing its severity score to this key level.

DoorDash (DASH) and Uber (UBER) also share this 5.0 score, reflecting broader challenges in the gig economy and consumer services sectors. Royal Caribbean (RCL) has seen its recovery stall, keeping its drawdown active and placing it at this critical junction. Finally, Gulf Resources (GF) also sits at 5.0, highlighting stress in the materials and resource sector. We will monitor these five assets closely in the coming weeks.

If their drawdowns deepen or fail to recover, they will cross the threshold into the red zone next month. This group represents a diverse set of industries, showing that the threat of entering the red zone is not limited to a single sector. The behavior of these borderline assets will provide crucial clues about the market's near-term direction. We will report on their status in our next monthly update.

5. Sector Patterns

Analyzing sector-level data helps us understand where market stress is concentrated and where relative strength remains. Our September data shows a clear divergence across different industries. The technology and communication services sectors continue to supply some of the most severe drawdowns. This is evident in the multi-year struggles of companies like PayPal, EPAM Systems, and Charter Communications.

These sectors have experienced a prolonged unwinding of previous peaks, leading to high severity scores. The energy and materials sectors also show pockets of extreme distress, as seen in enCore Energy and Gulf Resources. Industrial and trading conglomerates are not immune either, as demonstrated by Marubeni Corporation's sharp decline. On the other hand, traditional defensive sectors like consumer staples and utilities show lower average severity scores.

However, the massive influx of 388 stocks into the yellow zone suggests that stress is beginning to bleed into these safer areas. We believe this cross-sector migration is a key trend to watch, as it indicates that the drawdown is becoming more generalized. If defensive sectors begin to deteriorate, the overall market's average severity score will likely rise even further. We will track this potential sector rotation closely.

6. Month-Over-Month Trend

To determine the overall trajectory of the market, we must compare this month's data to historical trends. The data from September 2026 clearly points to an escalation in overall market stress. The fact that 238 stocks entered the red zone while only 173 exited shows a net increase in deeply distressed assets. This positive net flow into the red zone indicates that more assets are deteriorating than recovering.

Additionally, the average severity score of 5.9 is historically high, reflecting a deeper level of pain across our tracked universe. The most concerning metric, however, is the high number of assets entering the yellow zone. With 388 stocks transitioning into the yellow zone, we are seeing a massive buildup of potential future red zone assets. This suggests that the current wave of market distress is far from over.

Instead, we are likely in the middle of a multi-stage market correction. The first stage was characterized by a few extreme failures, but we are now seeing a broader, more systemic decline. We will continue to track these month-over-month shifts to determine when this trend begins to reverse. Our historical data shows that a sustained market recovery always begins with a reduction in yellow zone entries.

7. What to Watch in October

As we look forward to October 2026, our focus remains firmly on the data. The primary metric to watch will be the behavior of the 316 assets currently in the yellow zone. If these assets continue to deteriorate, we could see the red zone percentage rise well above the current 46.2%. We will also pay close attention to the five assets currently sitting at a severity score of 5.0.

Whether Danaher, DoorDash, Uber, Royal Caribbean, and Gulf Resources can mount a recovery or slip into the red zone will be a key indicator of market direction. Additionally, we will monitor the average severity score of 5.9 to see if it continues its upward march. A stabilization in this average score would suggest that the worst of the drawdown depth has been reached. Conversely, a further increase would signal that the market-wide correction is continuing to intensify.

We will provide our next comprehensive update at the end of October to track these critical developments. Our platform will continue to process daily data points to keep our subscribers informed of any sudden shifts. Until then, we advise our readers to focus on the objective metrics of drawdown depth and duration. These numbers speak for themselves and provide the clearest view of the market's true condition.