Dow's correction- how much more?

Dow has been dropping for the past few trading days; down 2.8% to 13295 from its record close of 13676 recorded on June 4. From the chart below, we can see that the Dow may find support at the psychological level of 13000 or the horizontal support of 12845 (Dow's February high). A break of these levels could send the Dow to test its tentative uptrend line, with support at 12600.

The current correction in Dow could be precipitated by investors' disappointment with Fed's decision to leave interest rate unchanged at the recent FOMC meeting. Hawkish comments have raised the prospect of further rise in interest rate in the future. Yesterday, the yield on the 10-year Treasury note soared to a 5-year high of 5.295%.


Chart: Dow's daily chart as at June 12 (courtesy of Yahoo Finance)