As spot gold hits the next optimal target zone around $1172, let's look at the big picture of the SPDR Gold Shares (GLD). The next optimal target zone off the big base formation in the GLD is 117.00/50.

If no profit-taking and/or corrective action occurs in and around 117 (give or take a couple of dollars), then the concept of vertical blow-off gets into full swing, with a potential next target of 128-132. At this juncture, only a bout of weakness that presses below 112.50 will trigger initial warning signals that perhaps the 117 area in fact is a near-term lid on the market. Furthermore, a decline that breaks 109.50 will confirm that a significant price peak has been established.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.