Having broken above its multi-decade trendline, 30Y Yields are starting to levitate faster than even the equity markets can handle...

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Following this week's bond-market rout, DoubleLine's Jeff Gundlach noted that the 30 Year Treasury yield "has broken above its multi-year base" which "should lead to significantly higher yields for investors".

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During a webcast last month, Gundlach said the effect that stimulus has on markets is akin to the effect that miracle grow can have on plants. Too much of it burns them out - which is why it's not encouraging that deficits are widening this late in the cycle.

And if yields continue to rise, the selling rout in both bonds and equities - a twin rally that has been fueled by QE and rising US debt levels - will likely worsen. Indeed, the bond market is facing a crucial test.

During that webcast, Gundlach pointed out that the S&P 500 and US debt outstanding have climbed in tandem since the bull market began.

And with the Fed in quantitative tightening mode, the markets are slowly losing a crucial source of support. While it's possible that rates could drop again, Gundlach said this is merely conjecture. Yields are on the cusp of a crucial breakout.

"As I have been saying, two consecutive closes above 3.25 percent on the benchmark 30-year Treasury means that my statement in July 2016 that we were seeing the low - I said italicized, underlined and in boldface - is now, looking at the charts, thoroughly corroborated," Gundlach told Reuters.

The 30-year is "the last man standing" in the Treasury market. And if the curve continues to steepen, equities will move lower, particularly if yields climb at an "alarming" pace.

"Also, the curve is steepening a little in this breakout, which is another sign that the situation has changed."

Already, "the stock market has started to take notice", Gundlach warned, "and will continue to... particularly if the speed at which rates rise becomes alarming".

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Gundlach finished his interview with another bold call. Namely, that stocks outside the US are already down significantly from the Jan. 26, 2018, synchronized high, "which will go down in history as the peak for the global stock market for this cycle."