condense the price action, the pattern that emerges off of last April's peak at 47.60 argues strongly that a complex intermediate-term correction ended at the Oct 4 low of 25.84, a decline of 46%. That was followed by a powerful new up-leg that within the past week has hurdled key resistance at 37.35/40.

From a pattern perspective, we can make the case that the current up-leg off of the Dec 29 low at 26.85 represents the "right side" of a big "W" -- or Double Bottom formation that was putting intense upward pressure on 37.35/40 on the way to my next optimal target zone of 42.30/60 and then to 44.00/30.

At this juncture, only a decline that breaks back beneath the Apr-Feb resistance line at 38.16 will compromise the current upside breakout and thrust towards 42.50.

Looking at gold, the SPDR Gold Shares (GLD) is heading for a confrontation with its prior significant rally peak at 175.46 (from Nov 8), which if hurdled and sustained should trigger upside follow-through to 182.75-183 relatively quickly.

At this juncture, only a decline that breaks 171.50 will compromise the current upside acceleration phase.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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