Over the last three months, I've been repeatedly telling my subscribers -- and anybody else who would listen -- that gold was going to make a major, multi-month top at the $1,010 target near the big March 22nd turn date.

The turn was a few days early, as the decisive breakdown came on Wednesday March 18th. Parabolic growth patterns like the one in gold can be an amazing ride to the upside, but it's absolutely critical that you side-step the periods where the pattern re-energizes itself. I call these "free-fall corrections", for obvious reasons, as the drops are breath-taking.

Even if you were unaware of the big target at $1,010, there were a few very important clues that gold was cycling into a free-fall correction. The most significant clue that gold was changing character was the breakdown below $992, and that's why we had our stop right there.

There is never a big decline in a financial market without this type of early warning. Free-fall declines do not just materialize out of nowhere. There is always a significant breakdown ahead of such a plunge. Always.

You just have to know what to look for.

During a parabolic growth pattern, a market has a tendency to repeatedly come back down to the last breakout spot on the hourly chart, but to not pull back farther than that. If it does go beyond that level, there should be a quick "slingshot" move back to the upside, which serves to re-energize the up trend. So watching the hourly chart is the key to survival in a parabolic growth pattern.

Even if you had no idea that $1,010 was a potentially major target, watching for an hourly breakdown would still have given you early warning that gold was moving into a correction.

The other important thing to know is that a market will typically come back and give one last "kiss goodbye" to the breakdown level prior to the big plunge.

I told my subscribers to get completely out of any remaining long positions on such a test back up to $992. Sometimes in this situation a market can carry back up beyond the breakdown level, and even make it back up for a double top. But I've learned from hard-won experience that it doesn't pay to mess around at a point like this. Once the pattern has shown you a significant hourly breakdown, you have to get out on the test back up, and not second-guess yourself.

So, you're saying, that's all well and good and congratulations and I'm happy for you and all that -- but what do we do now if we still have long positions?

Since this is the initial drop in a larger decline, gold should throw the bulls one more lifeline to the upside. Trust me, you are not going to feel like getting out on this rally -- as it will appear that the uptrend is coming back after a violent detour -- but you have to take advantage of this last chance and get out.

Again, don't allow yourself to get sucked in by the next rally's siren song. Unless you're prepared to ride out a severe correction down to $730, you have to take your profits and look to re-load at lower levels.

Typically in this situation there is a rally back up to the bottom of the last main breakdown area on the daily chart. In the current gold pattern, that works out to the $966 area.

I recommend using the coming bounce up to $966 as the last chance to get out before the next free-fall. The bigger downside targets for this correction are at least $850, with a good chance that the selling will feed on itself and push gold all the way down to $730.

The recent action in platinum is a good case study for how these corrections typically play out.

After the initial plunge, platinum was able to scratch and claw its way back up to the underside of the breakdown zone, right around $2,100. After that "kiss goodbye" platinum quickly plunged to $1,800, on its way to even lower levels.

A similar pattern should now develop in gold, as over the next week or so gold should be able to mount a rather tepid rally back up to the $966 area. This rally will not have the same verve and energy as the uptrend we just saw, as this will be a counter-trend rally in a corrective pattern -- a vastly different thing than a primary move in a parabolic growth pattern.

I should be able to pin-point this forecast with more detailed fractal projections, once I get a bit more information on how the bounce is developing. As always, I'll keep subscribers updated in my daily reports if there are any changes in this outlook.

This correction will ultimately give us a chance to absolutely load up on gold at much lower levels, ahead of the next huge rally. So it can be a good thing, and not something you have to endure.

David Nichols publishes the Fractal Gold Report, a daily report covering the gold market using proprietary techniques that go beyond technical and fundamental analysis. The Fractal Gold Report is available by subscription at www.fractalgoldreport.com.