ATH Drawdown measures how far the market has fallen from its all-time high, the dearest it has ever been. Nothing is filtered out, so it snaps back to nought at each fresh record and sinks steadily through every long decline.

That makes it the bluntest measure on the dashboard, and blunt is useful. There is no smoothing, no model and no judgement in it, only the gap between now and the best the market has ever done.

What it actually measures

The reading is the distance beneath the highest price on record. Every new high resets it to zero, and it deepens from there until the record is taken out again.

A run of new records keeps the reading pinned at zero for long stretches, and that flat line is itself information. It says there is no supply overhead from higher-priced sessions, because there have not been any.

Depth alone will not tell you which kind of decline this is

A deep intra-bull correction and the ordinary body of a bear market occupy the same range on this view. Both can sit well below the high, and the number gives no way to separate them.

Duration is the missing half. The same depth reached in three weeks and held for eighteen months describes two completely different markets, and this view reports only one of those dimensions. Read it with a measure of how long, or the depth will mislead you.

What it does not tell you

It cannot speak to whether a decline is finished. The deepest readings have clustered near capitulation and the view reports where price sits relative to its peak, not whether the fall has run its course.

It is also anchored to a single historical point, which makes it fragile in an unusual way. One record set in exceptional conditions defines the reference for years afterwards, and every subsequent reading is measured against that one session.

That also means the view can only ever get worse or reset. There is no partial recovery in it: either a new record is set and the reading returns to zero, or the market remains somewhere beneath a level it printed once.

How to read it

Macro Capitulation. Three quarters or more has been knocked off the highest price ever paid. Historically that has been the surrender stage at the end of a long decline.

Drawdown. The everyday middle of a long decline, and also as far as a severe wobble inside an advance can reach. Depth on its own will not tell those apart.

At the High. A fresh record has been set and the measure snaps back to nought. Nobody anywhere is holding at a dearer price.

ATH Drawdown runs on the Market Cycles dashboard next to Days Since ATH, Bull Drawdown and Cycle Timeline.

Common questions

Why does it flatline at nought for long spells?

Because each fresh record snaps it back to nought. A string of them keeps it flat on the floor, and that flatness is a statement in itself: nobody is holding at a dearer price.

How does it differ from Bull Drawdown?

This one measures against the dearest the market has ever been, full stop. Bull Drawdown keeps only the wobbles inside an established advance, measured from whatever peak was most recent.

Does depth alone make this a chance to buy?

The biggest figures have historically gathered near the point of surrender, though what is on screen is the distance from the peak and never a verdict on whether the fall has run its course.

Can depth tell a correction from a bear market?

No. Both reach the same range. Duration is what separates them, and this view does not report it.

Why is being anchored to one session a weakness?

Because a record set in exceptional conditions defines the reference for years, and every later reading is measured against that one day.