downtrend-duration-analyzer

1# Downtrend Duration Analyzer
2 
3## Overview
4 
5Analyze historical price data to identify downtrend periods (peak-to-trough) and build statistical distributions of correction durations. Generate interactive HTML visualizations with histograms segmented by sector and market cap to help traders understand typical recovery timeframes and set realistic expectations for mean reversion strategies.
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7## When to Use
8 
9- Trader asks about typical correction lengths for a sector or market cap tier
10- User wants to understand historical drawdown recovery times
11- Building mean reversion or pullback strategies that need realistic holding period estimates
12- Comparing correction behavior across different market segments
13- Setting stop-loss timeouts or position holding period limits
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15## Prerequisites
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17- Python 3.9+
18- FMP API key (set `FMP_API_KEY` environment variable or use `--api-key`)
19- Required packages: `requests`, `pandas`, `numpy` (standard data analysis stack)
20 
21## Workflow
22 
23### Step 1: Fetch Historical Price Data
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25Run the analysis script to fetch OHLC data for a universe of stocks and identify downtrend periods.
26 
27```bash
28python3 skills/downtrend-duration-analyzer/scripts/analyze_downtrends.py \
29  --sector "Technology" \
30  --lookback-years 5 \
31  --output-dir reports/
32```
33 
34### Step 2: Analyze Downtrend Durations
35 
36The script automatically:
371. Identifies local peaks and troughs using rolling window analysis
382. Calculates duration (trading days) and depth (% decline) for each downtrend
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