Weekly Drawdown Report: May 23, 2026

PayPal Is Down 85% Over 1,700 Days. What History Says.

The average Drawdown Severity Score™ across our tracked universe has climbed to 5.3 as of May 23, 2026. This mark indicates that the typical asset in our database is now firmly entrenched in the "Red Zone," a level of technical distress we define as any score above 5.0. Our data shows that high-intensity sell-offs are no longer isolated to speculative niches but are increasingly defining the broader market landscape.

Market Distribution: Red Zone Dominance

As of May 23, 2026, we track a total of 777 assets, and the internal breadth remains heavily skewed toward significant pullbacks. Our data shows that 338 assets, or 43.5% of our universe, are currently in the Red Zone with a Drawdown Severity Score™ of 5 or higher. This represents the largest segment of the market, suggesting that nearly half of all tracked equities are experiencing severe price erosion relative to their historical peaks.

The Yellow Zone, which includes assets with a Drawdown Severity Score™ between 2 and 5, currently accounts for 192 assets or 24.7% of the total. These stocks are in a state of moderate correction, often serving as the "waiting room" for either a recovery or a deeper slide into the Red Zone.

Finally, 247 assets remain in the Green Zone as of May 23, 2026. This represents 31.8% of our tracked universe. These assets maintain a Drawdown Severity Score™ between 0 and 2, indicating they are either trading near all-time highs or have successfully navigated recent volatility with minimal structural damage.

Notable Zone Shifts and Momentum

The week ending May 23, 2026, saw several significant transitions between our risk categories. The software and technology sectors continue to show high levels of stress, with several prominent names failing to exit the Red Zone. Zscaler (ZS) remains deeply embedded in the Red Zone with a Drawdown Severity Score™ of 8.7. Similarly, Zebra Technologies (ZBRA) shows a severity score of 10.4, while Zoom Video Communications (ZM) carries a severity score of 13.3.

We observed more severe distress in The Trade Desk (TTD), which remains in the Red Zone with a Drawdown Severity Score™ of 13.8. Workday (WDAY) also stays in the Red Zone with a severity score of 10.1. These numbers reflect sustained selling pressure that has lasted well beyond a standard 10% correction.

However, some assets showed signs of stabilization. Vanguard Health Care ETF (VHT) moved from the Yellow Zone to the Green Zone, ending the week with a Drawdown Severity Score™ of 1.8. Textron (TXT) followed a similar path, improving its severity score to 1.7 and reclaiming Green Zone status. iShares Exponential Tech ETF (XT) saw the most dramatic improvement, moving from Yellow to Green with a Drawdown Severity Score™ of 0.0, indicating it has returned to or very near its peak. Conversely, Take-Two Interactive (TTWO) slipped from the Green Zone into the Yellow Zone, now carrying a severity score of 2.2.

Highest Severity: The Long-Term Decliners

The assets with the highest Drawdown Severity Score™ as of May 23, 2026, are characterized by multi-year declines that have erased the vast majority of their peak market capitalization. Enviro-Hub Holdings (EU) currently holds the highest Drawdown Severity Score™ in our database at 22.8. Our data shows this asset is down 83.9% from its peak, a decline that has persisted for 5,581 days.

Nano Dimension (NNDM) follows with a Drawdown Severity Score™ of 19.5. It is currently down 98.1% over a period of 3,666 days. In the financial sector, American International Group (AIG) maintains a severity score of 18.9. While AIG has seen various structural changes over the decades, our data tracks its current drawdown at 93.7% below its historical high, spanning ,9278 days.

PayPal (PYPL) remains one of the most significant large-cap drawdowns in recent history. As of May 23, 2026, PayPal has a Drawdown Severity Score™ of 18.8 and is down 85.7% from its high. This sell-off has now lasted 1,702 days. Similarly, EPAM Systems (EPAM) carries a severity score of 18.3, also down 85.7%, with a duration of 1,603 days.

Approaching the Red Zone: Stocks at the Threshold

Several prominent stocks are currently hovering just below the 5.0 threshold that defines the Red Zone. These assets are in a critical state where further price weakness could trigger a significant change in their risk profile. Sherwin-Williams (SHW) currently has a Drawdown Severity Score™ of 5.0 and is down 22.2% over the last 483 days.

Expedia Group (EXPE) is also nearing the threshold with a severity score of 4.9, down 28.8% in just 93 days. This rapid descent highlights the velocity of the current move. Republic Services (RSG) also sits at a severity score of 4.9, though its 18.6% decline has developed over a longer period of 294 days.

Other notable names at the 4.9 severity score level include Nu Holdings (NU), down 32.1% in 80 days, and LyondellBasell (LYB), which is down 24.4% over 726 days. Capital One Financial (COF) and Constellation Energy (CEG) are also under pressure. COF carries a severity score of 4.9 with a 27.2% drawdown, while CEG sits at a severity score of 4.8, also down 27.2% from its peak.

Analyzing the 80% Drawdown Club

The presence of companies like PayPal and EPAM in the highest severity tier is a significant data point for the week ending May 23, 2026. When a major constituent falls more than 80% from its high, the Drawdown Severity Score™ accelerates because the duration of the decline begins to compound with the magnitude of the loss.

For PayPal (PYPL), the 1,702-day duration means the stock has been in a persistent downtrend for over four and a half years. According to Reuters, the fintech sector has faced consistent headwinds from shifting consumer behavior and regulatory scrutiny during this period. Our data shows that once a stock reaches a severity score above 15.0, the historical path to recovery typically involves a prolonged period of "basing" where the severity score flattens before it begins to drop.

What to Watch Next Week

Heading into the final week of May, we are closely monitoring the 4.9 severity score cluster. Stocks like Capital One Financial (COF) and Expedia Group (EXPE) are a single down day away from crossing into the Red Zone. Our data shows that when multiple stocks in a similar sector (such as Financials or Consumer Discretionary) cross the 5.0 threshold simultaneously, it often signals a broader regime shift for that industry.

We are also watching for any signs of mean reversion in the highest severity names. While Enviro-Hub Holdings (EU) and Nano Dimension (NNDM) have remained in the Red Zone for years, any significant reduction in their Drawdown Severity Score™ would require a sustained price increase that outpaces the "decay" of the drawdown duration. As of May 23, 2026, no such reversal is evident in the data.

The market remains bifurcated. While 31.8% of assets are enjoying Green Zone status, the average severity score of 5.3 tells the real story: the weight of the drawdowns in the other 68.2% of the market is currently the dominant force in the financial landscape.