The Thursday-Friday-Monday Pattern | Tom Hougaard

What happens when we start out trading on a Monday, and the previous Thursday’s high was higher than Friday’s high? Over the last 52 weeks, there were 21 instances where the price action on Friday was unable to trade above the highest point of the previous day, Thursday. I then looked at what happened on the following Monday. If there was a holiday on the Monday, I would view the price action on the Tuesday. Let me show you some examples:

When Thursday’s high was higher than Friday’s high, Monday traded below Friday's low.

 

Considering the random nature of the markets on a day by day basis, there shouldn’t be a pattern, and if there is, I have found an edge to exploit. I was surprised to find that on 20 out of the 21 occurrences, the Dow traded lower on Monday, often lower than Friday’s low. 

 

Here is how to apply this strategy:
1) Switch to the daily time frame.
2) Confirm that Friday's high is lower than Thursday's high.
3) Mark the low of the Friday candle.
4) Move to a smaller time frame for entry.
5) Wait for the price to reach a bearish fair value gap.
6.) Enter a short position, expecting the price to hit Friday's low on Monday.
7) On Monday, monitor the regular New York trading session.

I am not in the business of deluding people, so here is an example where it did not work: 

 

It did not work: Monday did not get below the lows of Friday.  

 

And here is one I traded earlier in August 2019. I went home short over the weekend –always a very risky strategy – and I was rewarded for it (this time!):

I assume you notice that there are often gaps associated with the Thursday-Friday-Monday pattern. Gaps are an inevitable part of trading life. 

Quoted from:
Tom Hougaard (2019)  - What I Wish Someone Had Told Me 20 Years Ago. 

 

Examples of Tom Hougaard's Scenario Analysis:
If Monday so far is the highest traded point for the last 3 days, i.e. Monday, Tuesday, Wednesday, 

then how often is Thursday going to trade below the low of Wednesday?
What happens to Monday if the previous Friday trades below the highs of Thursday?

See also:

Tom Hougaard's YouTube channel.  

Darya Filipenka (April 3, 2024)  - ICT Fair Value Gap.

Darya Filipenka (March 18, 2024)  - ICT Draw on Liquidity.

Cameron Benson (August 20, 2023)  - Three-Push Reversal Patterns. 

orderbloque (March 1, 2025)  - Market Logic Based on Liquidity, Volume, and Inefficiency.

Tom Hougaard (2022) - Best Loser Wins: Why Normal Thinking Never Wins the Trading Game.

oooo0O0oooo

 

But is that actually true: does Tom Hougaard's Thursday-Friday-Monday Pattern really have an edge? Here are the results of the respective 2003-2025 backtests for the S&P 500, Nasdaq, Dow Jones, and Russell 2000:

 

S&P 500: 472 setups; 231 wins: 48.94% win rate: No edge.                            
Nasdaq: 449 setups; 249 wins: 55.46% win rate: Slight positive edge.              
DJIA: 458 setups; 223 wins: 48.69% win rate: No edge.                            
Russell 2000: 464 setups; 258 wins: 55.60% win rate: Slight positive edge.

 

 

                            

 

Gold Nearing Its 54-Month Hurst Cycle Peak | David Hickson

Gold's price action has been challenging to analyze due to its recent flat trend, forming a wedge pattern. Gold is rising into an 80-day cycle peak, with potential for a higher price and a major 54-month cycle peak ahead.

Gold is currently rising into an 80-day cycle peak, and a higher price is expected in the near term.

Peak-Based Analysis (price peaks are synchronized): The current 54-month cycle peak is not sharply isolated, reducing confidence in its placement. A larger, sharper peak is expected, potentially displaced to the right, possibly reaching higher prices within the ongoing 80-day cycle peak.
Trough-Based Analysis (cycles align at troughs, which is mathematically incompatible with peak synchronization): The composite model (combining both analyses) shows divergence from the actual price, particularly recently, despite aligning at the 80-day cycle trough. This discrepancy suggests the major cycle peak is mispositioned, reinforcing the likelihood of a significant peak forming soon.

Close monitoring is needed due to the analysis discrepancy and non-ideal peak characteristics.

Reference:
David Hickson (14 July 2025)  - Hurst Cycles Analysis for Gold. (video)

 

See also:

Namzes (January 12, 2025)  - 2025 Gold Forecast.  

TPR (2018) - J.M. Hurst’s Cyclic Theory.

 

Gold (CMX) 40 Year Seasonality (1980-2019).

 

Gold likely remains in a broader bullish Elliott Wave structure, still supporting the expectation of a new all-time high. The preferred view is that wave four ended at $3,123 and wave five has begun, or that gold is forming an ending diagonal, having completed wave one and now correcting in wave two. This would lead to a five-wave diagonal, typically marked by overlaps, ultimately reaching new highs in a less aggressive fashion. The alternate view is that gold remains in an extended wave four correction. However, this is seen as less likely due to the disproportionate time it would take compared to previous subwaves, making it structurally inconsistent with typical Elliott Wave proportions.

  

Elliott Wave structure favors another all-time high around $3,600 depending on

how Wave 5 unfolds [see the above mentioned major 54-month Hurst cycle peak].

 

Support at $3,123 and especially $2,970 remains critical. Staying above these levels keeps the bullish case intact. A decisive break below $2,970 with increased downside momentum would raise the likelihood that gold has topped. The structure still favors another all-time high, with a potential target around $3,600. Unless $2,970 breaks with conviction, the market bias remains upward, with summer consolidation expected to resolve higher into the fall and year-end.

 

 

Following the completion of Wave 5, gold is expected to undergo a longer-term, multi-year retracement—either to around $2,541, or more significantly, by 61.8% to 78.6%, potentially reaching levels near $1,379.50 or even $884.20.

 

Reference:
HKCM Global (June 27, 2025)  - Gold Bull Market Losing Steam – Time to Reposition? (video)

How Markets Move: The Natural Cycle of Range Change │ Larry Williams

Markets typically shift from small ranges to larger trend moves. When the market is in a large trend move, wait for it to settle into smaller ranges before getting involved. This gives more reliable setups when the market trends again. Market tops generally occur when the price closes well off its low, while market bottoms happen when the price closes near its low. Most traders get emotional during these times, buying at tops and selling at bottoms. Once you understand this, it becomes easier to make smarter trades.

Small Ranges Beget Large Ranges. Large Ranges Beget Small Ranges.

Markets move from congestion to creation (expansion), transitioning from small ranges to larger, more defined trend moves. A small range signals buildup, and a large range signals an impending trend. If I see a small net change from open to close, I know a large trend move is likely coming and am prepared to act on it. Here’s an example using the NASDAQ: Notice how volume fluctuates throughout the day: heavy volume in the morning, a dip in the middle, and a surge towards the end. 

"U" shaped intraday: Heavy volume in the morning, a dip in the middle, a surge at the end.

This pattern is consistent across markets. It’s like a freeway: traffic is heavy in the morning, dies down in the middle of the day, and picks up in the afternoon. Understanding this helps day traders identify opportunities in the morning and towards the end of the day, while avoiding the midday lull. Volume drives range, and large ranges happen at the start and end of the day. This is when short-term traders make money. We need volatility and large ranges to profit.

 There are three key cycles in market behavior: 

(1) small range/large range, (2) moving closes within ranges, and (3) closes opposite openings. 

All three cycles work equally well in any timeframe and market.

"Do yourself a big favor: Mark off all the large-range days [in the chart above], and then study the size of the ranges just

prior to explosive up-and-down days. See what I see? We are given ample warning of virtually every large-range day 

by the shrinkage of ranges a few days earlier."

The key takeaway for short-term traders is that not every day offers a high-probability trade. You need to identify days with potential for explosive moves and not expect large profits daily. It’s about finding that opportunity.

As for market tops, they usually occur when prices close near their highs, and bottoms happen when prices close near their lows. Focus on these closing patterns to determine when to buy and sell.

Trend is a function of time. The more time in a trade, the more opportunity for trend.

The most important insight in trading is that trends are the basis of all profits. Without a trend, there are no profits. But what causes trends? Trends are fundamentally a function of time—the more time you hold a trade, the more opportunity for a trend to develop. The challenge with day trading is that trends occur only about 15% of the time. Most of the time, prices are consolidating, making it difficult to catch a big trend move. Limiting yourself to a few hours of trading only targets that small window when trends are likely to occur.

 My Day Trade Secret: HTTC - Hold To The Close.

The day trader dilemma is that they have limited time to catch trends. Holding positions overnight allows you to capture longer trends and larger profits. A small bet with the potential for a big move is the key advantage of holding positions over time. 

 

 » How you know a large trend move is coming. «

 

Many day traders are afraid to hold positions overnight. However, if you do the math, you'll see that most market moves happen between the close of one day and the open of the next. Moves within the day are often smaller and less reliable. For short-term traders, the key to success is recognizing large range days and holding positions to the close. This is how you catch a big move during the day.

 

Reference:
Larry Williams (2022) - Trading Tactics and Indicators I Still Use. (video)

 

 » Hold To The Close. « 

S&P 500 E-mini Futures (daily bars).

 Narrow Range 4 & 7 Days and Inside Bar Narrow Range 4 & 7 Days.

 

» There are only two ways a short-term high or low is broken. «

NVIDIA (daily bars).

 Narrow Range 4 & 7 Days and Inside Bar Narrow Range 4 & 7 Days.

See also:

Larry Williams (2011) - Long-Term Secrets to Short-Term Trading (2nd edition).

  Larry Williams (1999) - Long-Term Secrets to Short-Term Trading (1st edition).

Larry Williams (2000) - Swing Points as Trend Change Indication.

Larry Williams (1999) - Three Bar Patterns: The Smallest Fractals of Market Structure.

 Toby Crabel (1990) - The Principle of Contraction/Expansion.

 Toby Crabel (1990) - Definition of Price Patterns.

Linda Bradford Raschke (1995) - Capturing Trend Days. 

Support Holds on S&P 500, Bullish Pattern Targets 6,100s | Stephen Suttmeier

First support shifts slightly to the 5870s-5850s area on the S&P 500, which bent but did not decisively break last week. Continuing to hold this support would keep the pattern bullish, with upside potential to the July-September cup and handle. The early 2022 to early 2024 big base breakout targets are into the 6,100s. The cup and handle breakout and retest zone at 5,700-5,650 offers additional support.

The S&P 500 advance-decline (A-D) line reached a new high on Friday (11/22), and the NYSE Composite stocks A-D line hit a new high yesterday (11/25). This neutralizes the mid-October to early November bearish divergences for these market breadth indicators. It also provides bullish confirmation for the new highs on the NYSE and serves as a potential leading indicator for new highs on the S&P 500, increasing the likelihood of following bullish seasonality into year-end.

Stephen Suttmeier, November 26, 2024 [HERE], and [HERE]

 

Trend-wise, while the cap-weighed S&P 500 continues to float above its trendline, the chart above shows that the index is only two standard deviations above trend. At major extremes it can reach three standard deviations.

Jurrien Timmer, November 26, 2024.

S&P 500 Cup-and-Handle Breakout Targets 5,930 & 6,180 | Stephen Suttmeier

The S&P 500 has experienced a bullish breakout from a cup-and-handle formation that formed between July and September, indicating potential upside targets of 5,930 and 6,180. 

Seasonal trends for the fourth quarter further support these targets. Last week’s tactical breakout appears strong, with support near the 5,775-5,745 range. Importantly, the cup-and-handle pattern remains intact as long as the S&P 500 stays above the 5,600s.

Stephen Suttmeier — October 15, 2024.  

Price Action Patterns & Entries at High and Low of the Day | Cameron Benson

Our focus is on price action trading at key levels: daily high and low, and the previous day's extremes. We examine how price reaches these levels — through Stair-Stepping or Ramping — and its subsequent behavior. The price action patterns include M's, W's, Double Tops/Bottoms, and Pin Hammers at daily highs and lows. 

 

 Stair-Stepping and M Patterns: These indicate potential reversals at daily highs or lows, 

with detailed entries and exits often managed through lower time frames.

Ramping is characterized by parabolic price movements and often leads to swift reversals. Observing tight candle patterns with minimal overlap helps identify strong trends and potential breakouts. We also look for specific patterns like Stair-Stepping and Three Pushes, with Peak Formations signaling possible reversals.

 

 Ramping Behavior: Recognized by tight, parabolic moves followed by rapid reversals. 

The ramp into extremes usually signals significant price shifts.

The following 5 minute charts of the NASDAQ are from last week (September  9-13, 2024). They show Entry and Exit Strategies, using Pin Hammers and Engulfments for Entries, and managing stops based on price action, with adjustments for larger, more volatile bars.

Monday, September  9 (Day 1 of 3 Day Cycle):

 

 Identified an M pattern at the high of the day with a pin hammer and engulfment, suggesting a strong short entry.

Tuesday, September  10 (Day 2):

 

Despite a promising setup, a large entry bar resulted in a stop-out. 

Emphasis on avoiding large entry bars and managing risk.

 

Wednesday, September 11 (Day 3/1): 

 

 Similar to previous days with M patterns and engulfments, also highlighting entry points and risk management.

Thursday (Day 2) and Friday (Day 3), September 12-13:

 

 Charts show patterns like descending triangles and W formations, 

with a focus on understanding price behavior relative to session timings.

 

Successful short-term trading relies on recognizing and acting upon the above presented price action patterns, managing entries and exits based on contextual behavior, and adapting strategies according to the specific market conditions within the 3 Day Cycle.

 

Reference:
Cameron Benson (September 14, 2024) - Price Action High And Low Of The Day (Day Trading Entries)(video) 
Cameron Benson (September 14, 2024) - Price Action High And Low Of The Day (Day Trading Entries)(pdf)
Cameron Benson (June 16, 2024) - The Complete 3 Day Cycle Short-Term Trading System.

Stacey Burke (December 5, 2023) - The Three Day Cycle & Parabolic Trade Setups.
Cameron Benson (August 20, 2023) - Three-Push Reversal Patterns.

 Richard D. Wyckoff (August 30, 2024) - Re-Accumulation & Re-Distribution Range Patterns.

Richard D. Wyckoff (December 21, 2022) - Accumulation & Distribution Schematics.  

Toby Crabel’s "Bull Hook" Trading Strategy Tested | Ali Casey

As an algo trader, I value patterns for their ease of programming and testing, which allows for the development of robust trading strategies. Today, we'll explore bull and bear hooks, patterns that can vary in details but generally serve to catch traders on the wrong side. Toby Crabel, Joe Ross, and Thomas Bulkowski, among others, have variations of these patterns.

Toby Crabel's original definition of the Bull Hook pattern:

» A Bull Hook occurs on Day 2. A Bull Hook is defined as a day with a higher open than the 

previous day's high followed by a lower close with a narrowing daily range. The next day (Day 1), 

a trade is taken on the initial move off the open, preferably to the upside. «

 

Toby Crabel's original definition of the Bear Hook pattern:

  » Bear Hook is a day in which the open is below the previous day's low and the close 

is above the previous day's close with a narrow range relative to the previous day. As implied by 

the name there is a tendency for the price action following a Bear Hook to move to the downside. «

The Bull Hook pattern has two main forms:

Bull Hook 1: In a downtrend, the pattern is identified when today's bar is an up bar with a smaller range than the previous day and is an inside day (high lower, low higher than the previous bar). We buy with a stop order above the high of this bar.
Bull Hook 2: Here, today's bar is a down bar with a smaller range than the previous day, opening above the previous high and closing below the previous close. This pattern involves just two bars.

For testing, I used TradeStation with S&P 500 e-mini futures data. The backtest for Bull Hook 1 was disappointing, showing a loss with only 15 trades, which seemed unusual given its pullback nature. A deeper analysis suggested that the specific conditions, particularly the inside day and green bar requirements, were limiting trades. By removing some conditions, like the inside day and green bar, and focusing on a simpler pullback strategy, the results improved significantly with about 200 trades and positive performance metrics. 

 

For Bull Hook 2, the test also yielded fewer trades than expected, which might be attributed to its breakout nature, not performing well on the S&P 500. Simplifying the conditions here also improved the results somewhat, though it remained less effective. The Bear Hook pattern, when flipped for long trades, performed better but still had a low trade count. Removing some conditions and simplifying it increased the trade count and improved performance. 

 

While both Bull Hook patterns had potential, their effectiveness was highly dependent on specific conditions and the number of trades generated. Simplifying the patterns often led to better results.

Reference:
Ali Casey (July 28, 2024) - The Secrets of Toby Crabel’s Bull Hook Trading Strategy Exposed. (video)
 Toby Crabel (1990) - Day Trading With Short Term Price Patterns And Opening Range Breakout.
MyPivots.com (2024) - Scanner for Toby Crabel Price Patterns in the E-mini S&P 500 Futures. 

 

See also:

Thomas Bulkowski (2013) - Hook Reversal, Uptrend.

 Thomas Bulkowski (2013) - Hook Reversal, Downtrend.

Joe Ross (1991) - Trading the Ross Hook.

Slava Loza (2021) - How to Trade the 1-2-3 Reversal and the Ross Hook Patterns.

Thomas Bulkowski on Hook Reversals in an Uptrend and in a Downtrend.

2-Bar Narrow Range Setup | Toby Crabel

2-Bar Narrow Range (2BNR)  represents a condensation of the market concept called congestion or contraction. Contraction is subsumed within the market Principle of Contraction/Expansion which states that the market, having a specific nature, is constantly changing from a period of movement to a period of rest and back to a period of movement. This interchange between the phases of motion and rest are constantly taking place with one phase directly responsible for the other's existence. 2-Bar NR represents this market principle and provides a means of quantifying contraction in any market environment. This is possible because of the open-ended nature of the concept 2-Bar NR. 

 

 2-Bar Narrow Range (2BNR) in the S&P 500 on June 26, 2024.

If the 2-bar range is the narrowest range from high to low of any two day period relative to

any two day period within the previous twenty days, we are sitting on a 2BNR trading setup for June 27.

Because it is not dependent on a constant measurement it represents contraction in a volatile or narrow market period. In other words, contraction is a relative condition that can occur even in a volatile market. Once a market concept is formulated it is tradable. An ORB (Opening Range Breakout) trade is taken the day after the 2-Bar NR formed. An ORB trade is entered at a predetermined amount above or below the opening range (stretch), that is the range of prices that occur in the first 30 seconds to 5, 15 or 30 minutes of trading. 

 

The assumptions are that with a contraction of this type trending action would follow the direction of the breakout, and that because this pattern exhibits a more defined contraction that trending would take place over the next several days also. It is advantageous if the 2-Bar NR is holding at an important angle of support/resistance, including trendlines, when it is formed. Once the market has moved away from the open in one direction after a 2-Bar NR, it should not return to the opening price. If it were to do so, that would disqualify the day as a trend day. Trending action is ideal and is expected after the pattern.

 

Reference:

Toby Crabel (1990) - Day Trading With Short Term Price Patterns And Opening Range Breakout.

Toby Crabel (1990) - 2-Bar NR and ORB.