Weekly Drawdown Report: May 16, 2026

Over 43% of tracked assets have crossed into the high-risk "Red Zone" as of May 16, 2026. This significant shift indicates that nearly half of the market is currently experiencing drawdowns that our data classifies as severe or historically significant. The average Drawdown Severity Score™ across our entire universe of 805 tracked assets now stands at 5.4.

This average indicates a market-wide posture that leans toward elevated risk. While some sectors show signs of stabilization, the breadth of the current decline suggests that selling pressure is not confined to a single industry. Our data shows that the number of assets in the most critical drawdown phase has accelerated over the last seven days.

Market Distribution and Risk Assessment

As of May 16, 2026, the DrawdownAlerts platform tracks 805 total assets to provide a comprehensive view of market health. We categorize these assets into three primary zones based on their Drawdown Severity Score™. The current distribution reflects a market under considerable stress.

Our data shows 351 assets are currently in the Red Zone, representing 43.6% of the total tracked universe. Assets in this category carry a Drawdown Severity Score™ of 5.0 or higher. This signifies that the current price drop is either exceptionally deep, unusually long, or both, compared to the historical behavior of that specific ticker.

The Yellow Zone currently contains 198 assets, which accounts for 24.6% of our data set. These stocks maintain a severity score between 2.0 and 5.0. This middle tier often represents stocks in the midst of a standard correction or those beginning to recover from deeper troughs.

Finally, 256 assets remain in the Green Zone, making up 31.8% of the market. These assets have a Drawdown Severity Score™ below 2.0. Stocks in this zone are typically trading near their all-time highs or have successfully navigated recent volatility with minimal technical damage.

Major Zone Shifts and Momentum Changes

The week ending May 16, 2026, saw several high-profile stocks migrate between risk categories. These shifts often signal a change in the underlying momentum of a stock's drawdown cycle. Perhaps the most notable move came from Exxon Mobil (XOM), which transitioned from the Yellow Zone to the Green Zone. With a current severity score of 1.8, the energy giant has successfully mitigated its recent pullback.

Conversely, we observed aggressive downward moves in the technology and crypto-adjacent sectors. TeraWulf (WULF) crossed from the Yellow Zone into the Red Zone, ending the week with a severity score of 5.6. This indicates the stock's decline has reached a level of historical significance that warrants increased monitoring.

Verizon (VZ) and WEC Energy Group (WEC) both moved from the Green Zone into the Yellow Zone. Verizon (VZ) currently holds a severity score of 2.1, while WEC Energy Group (WEC) sits at 2.1 as well. These moves suggest that defensive sectors are starting to see the same erosion of support that hit growth stocks earlier in the year.

The most dramatic shift occurred in iShares Exponential Technologies ETF (XT), which bypassed the Yellow Zone entirely. It moved from the Green Zone directly into the Red Zone with a Drawdown Severity Score™ of 8.2. Such a rapid escalation in severity typically occurs when a stock or ETF breaks through multi-year support levels on high volume.

Extreme Drawdowns: The Highest Severity Scores

The assets with the highest Drawdown Severity Score™ represent the most extreme cases of value erosion in our database. These are not simple pullbacks: they are historic devaluations that have lasted years, or in some cases, decades.

Enviro-Hub Holdings (EU) currently holds the highest Drawdown Severity Score™ in our system at 22.7. The stock is down 83.4% from its peak. What makes this severity score so high is the duration of the decline. Our data shows Enviro-Hub Holdings (EU) has been in a drawdown state for 5,576 days.

Nano Dimension (NNDM) follows with a severity score of 19.6. The stock has seen a 98.2% decline from its highs over a period of 3,661 days. Similarly, American International Group (AIG) maintains a Drawdown Severity Score™ of 18.9. While many investors associate American International Group (AIG) with its 2008 collapse, our data shows the stock remains 93.8% below its peak after 9,273 days.

In the fintech space, PayPal (PYPL) continues to struggle. It currently carries a Drawdown Severity Score™ of 18.8. The stock is down 85.6% from its high, a decline that has now persisted for ,1697 days. According to Bloomberg, the company has faced stiff competition from Apple Pay and other digital wallet providers, which has contributed to this prolonged slump.

EPAM Systems (EPAM) rounds out the top five with a severity score of 18.6. It is currently down 87.0% from its peak over a span of 1,598 days. For these five stocks, the Drawdown Severity Score™ reflects a state of "permanent" impairment that differs fundamentally from a standard market dip.

Approaching the Red Zone: Stocks on the Edge

While the highest severity stocks are well-known laggards, the "Approaching Red Zone" list identifies stocks where the drawdown is becoming critical right now. These stocks have a Drawdown Severity Score™ between 4.0 and 5.0.

CBRE Group (CBRE) is at the immediate threshold with a severity score of 5.0. It is currently down 24.3% over the last 74 days. In the waste management sector, Republic Services (RSG) is showing unusual weakness. It has a severity score of 4.9 and is down 18.9% from its high. While an 18.9% drop might seem mild compared to others, for a low-volatility stock like Republic Services (RSG), this represents a significant departure from historical norms.

The financial sector is also seeing a cluster of stocks nearing the Red Zone. Wells Fargo (WFC) has a severity score of 4.9, having dropped 23.8% in 91 days. Capital One (COF) shares a similar profile with a severity score of 4.9 and a 27.4% decline over 90 days. Isabella Bank (ISBA) is also at a 4.9 severity score, down 27.4% over 100 days.

Real estate investment trusts are not immune to this trend. AvalonBay Communities (AVB) holds a severity score of 4.9, with a 21.4% decline lasting 482 days. Software and advertising firms are also represented, with AppLovin (APP) at a 4.8 severity score (down 31.7%) and Shiloh Industries (SHMD) at 4.8 (down 34.1%).

Maintaining the Red Zone: Persistent Declines

Several stocks that were already in the Red Zone saw their Drawdown Severity Score™ increase this week, indicating that a bottom has not yet been established. Wayfair (W) is a prime example, currently carrying a severity score of 13.3. The online retailer remains in a deep drawdown with no immediate signs of recovery in our technical data.

Workday (WDAY) also remains firmly in the Red Zone with a severity score of 10.3. Despite various earnings reports and corporate updates, the stock has not been able to generate the upward momentum required to exit this high-severity state. Ubiquiti (UI) and Vantage Group (VG) also remain in the Red Zone with severity scores of 7.1 and 5.1, respectively.

When a stock stays in the Red Zone for an extended period, it often indicates that the market is repricing the company's long-term growth prospects. Our data shows that the longer a stock stays above a severity score of 10.0, the lower the statistical probability of a rapid return to previous all-time highs.

What to Watch Next Week

Heading into the final weeks of May, we are closely monitoring the 24.6% of assets currently in the Yellow Zone. Specifically, the cluster of financial stocks including Wells Fargo (WFC) and Capital One (COF) are only 0.1 points away from entering the Red Zone. If these stocks do not see a reversal in the coming days, the percentage of the market in the Red Zone will likely exceed 45%.

We are also watching Wheaton Precious Metals (WPM), which remained stable in the Yellow Zone this week with a severity score of 3.6. Precious metals often act as a hedge during periods of high market-wide drawdown severity. If Wheaton Precious Metals (WPM) begins to move toward the Green Zone, it may signal a shift in investor sentiment toward "safe haven" assets.

Finally, the rapid move of iShares Exponential Technologies ETF (XT) into the Red Zone suggests that tech-heavy portfolios may face continued volatility. We will continue to track the Drawdown Severity Score™ for these and 800 other assets to provide an objective look at market risk.