According to a Friday note from Bank of America, the unraveling of the bond market will batter the stock market.

Bonds are experiencing their worst decline since 1949 as interest rates rise. Global bonds are down even more than the US Aggregate Bond Exchange Traded Fund.

There is a risk that soaring interest rates and falling bond prices will cause investors to liquidate their most crowded trades in the stock market.

"Bond crash means highs in credit spreads, lows in stocks are not yet in," BofA's Michael Hartnett said.

The long US dollar, long US tech, and long private equity trades have been held by investors for a long time and can be undone by a credit event.

Apple, Amazon, and Microsoft make up 20% of the S&P 500, thanks to those crowded trades.

When investors sell what they love and own is true capitulation.

One more sign that a bottom has been reached in the stock market is when interest rates peak, but given the Fed's commentary at Wednesday's meeting, that may not happen soon.

"Fed funds, Treasury yields, US unemployment rate all heading into 4-5% range next 4-5 months/quarters, and until they get it are likely to press shorts."

If the US stock market continues to fall, Hartnett is positive. "Nibble at 3,600, bite at 3,300, and gorge at 3,000," Hartnett said. Cash and commodities are likely to perform better than bonds until those levels are reached, according to the note.

The decline to Hartnett's 3000 scenario on the S&P 500 is a potential downside of 18%. The S&P 500 fell to a low of 3,663.