Gold could double, says top US trader, by Vernon Wessels
July 23 2002 at 06:35AM
Johannesburg - The price of gold could double from its current level of about $320, depending on how the political crisis in the Middle East develops and the role the US plays in diffusing the tension, according to Joe DiNapoli, a well-known US trader and author.
The threat of another terrorist attack against the US and the long-raging battle between Israel and Palestine was keeping investors out of US equities more than the nation's economic troubles or corporate accounting scandals.
"A lot of the trouble in US equities is being caused by terrorism. People want to blame corporate accounting issues,
which are serious, but we know how to fix that. We can put a few people in jail and change accounting rules.
"But the US is not fixing the political situation, in fact everything we're doing is exasperating it and a lot of people know that," said DiNapoli, who is in South Africa this week to host a series of lectures on his traders' manual: Trading with DiNapoli Levels.
He said the Dow Jones industrial average would find support between the 7 000 and 7 500 level while the tech-laden Nasdaq could expect to find support at 908.
And when the markets test those support levels, DiNapoli "will be looking for a place to go long, seriously, and wait for a nice move up.
"I buy dips in an uptrend, precalculate my profit objectives and sell rallies in a down trend on precalculated profit objectives. The leading indicators do not tell you the trend, but they do tell you where to get in," he explained.
"The beauty of what I do is that you know ahead of time where you want to get in and where you want to get out.
"The disadvantage of the technique is that you may want to buy at a certain level and it may come down very close but then run away. Some people cannot deal with that E I have no problem with it," DiNapoli said.
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