Technically tracing is a no, no, seeing as how most artists that do it always use the work of another artist who was able to pull it off on their own skill. Using reference however, is allowed as it gives you what you need to be able to do what you have in mind.
I've had my own work traced before (which is really weird but okay) and it is a little ridiculous so I can see why people would be in agreement with it. However, your reference was used from a wallpaper site and no watermark is located anywhere. Getting ahold of the photographer who took the shot would be difficult and even then I feel as though it would be a waste of effort. Seeing as how if it was from a free website, there's bound to be thousands of the same copy and again, little lead of where to begin.
Its a hard call but imo, I'd use references more as a base for a start to grow on. Rather than making it look like a heavy trace as it does. Iit might not look as pretty or would even look bleh, but at least then you avoid people being the jerks they are who love to rip into others like this and you further improve your skill.
-sobs- I don't want that last bit to seem rude at all, I'm just trying to be helpful.
