Bloomberg writes the last 10 trading days the S & P 500 experienced its greatest momentum swing in history. The next closest reversal was 1987 with the current one greatly exceeding the one 31 years ago. Commodities also experienced its biggest five-day momentum swing since 2007.

I guess it is safe to write that the momentum trend following — the major trading strategy of the last four years — has died a violent unglorified death. The term “velocity of change” has just taken a new meaning.

A seemingly 20 bps innocuous rise in the 10-year Treasury yields from January 26 yield of 2.65% to 2.85% on February 8 is the accepted catalyst for the rout in equities that have wiped out $3 trillion in US stocks and $5 trillion globally. At one juncture it was the worst weekly rout since October 2008. Again referencing Bloomberg, the current “correction,” defined as a drop of 10%, was faster than any time since 1950.

I rhetorically ask what happens if yields breach the 3% level? Perhaps the selling in equities has already discounted such an increase, the result of algorithmic trading.

As I noted on Friday, equities historically fall in the initial stages of monetary tightening. What I also stated was that because of market complacency, I believed that the overnight rate would not be increased by more than 0.50% versus the Fed’s forecast of a 0.75% increase, the market had to play catch up, magnified by fears of a 1.0% increase.

Friday, JP Morgan published its forecast of 4 interest rate hikes in 2018 and another 4 in 2019, lifting the overnight rate to 3.25% to 3.5%. The Fed forecast is a 2% targeted rate in 2018 and 2.5% in 2019 and 3.0% by 2020.

For many years the monthly release of the CPI and PPI were viewed as top tier indicators, capable of dramatically moving markets. During the last 7-8 years, the indicators lost their perceived importance given the widely accepted thesis of secular disinflation and stagnation. In my view, secular disinflation and stagnation has now been replaced by synchronized global growth and inflation, a dramatic change that few had expected.

I think I can write with some certainty that both data points may have been quickly elevated again to top tier status. The CPI is released Wednesday and PPI on Thursday.

Like most, I hope this week is the inverse of last week.

Last night the foreign markets were mixed. London was up 1.25%, Paris was up 1.35% and Frankfurt was up 1.64%. China was up 0.78%, Japan was down 2.32% and Hang Sang was down 0.16%.