With many people still wondering if the downside action has been a test of the recent lows, today King World News is pleased to share an extraordinary piece which takes a look at the staggering amount of withdrawals by frightened investors out of mutual funds in the past 3 months as panic recently began to engulf the world.  This piece also includes two key illustrations that all KWN readers around the world must see.

October 1 (King World News) – Jason Goepfert at SentimenTrader:  “Investors fled U.S. mutual funds in August. Domestic funds suffered more than $60 billion in outflows over the past three months, among the most severe redemptions in thirty years. As a percentage of total assets, the damage wasn’t as bad but still ranks as extreme (see chart below).

KWN SentimenTrader I 10:1:2015KWN SentimenTrader II 10:1:2015

It’s not news that investors got scared in August.

Many of the indicators that we looked at near month-end were at multi-year or even decade-long extremes of fear and uncertainty.

That manifested itself in investors pulling money from domestic mutual funds, as they yanked money out to protect against another bear market…

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SentimenTrader continues:  “According to the Investment Company Institute, mutual funds that invest primarily in the U.S. suffered outflows of more than $17 billion in August.

That brings the three-month total flow to negative $63 billion. The last time these funds had this much of an outflow over a three-month period was December 2012 and it ranks among the largest amounts dating to 1984.

Expressed as a percentage of assets, the three-month outflow totals just under 0.8% of assets. That doesn’t seem like much, but it still ranks among the larger outflows over a three-month period.

The arrows on the chart highlight the other times the three-month flow was positive within the past six months, then dropped to -0.75% or worse.

Most of these occurrences marked at least intermediate-term bottoms for stocks, with notable exceptions in 2001 and 2008.

The key, of course, was whether this was a temporary blip during a bull market or the start of an exodus that cascaded into a bear market.

Price structure is the best clue in that regard and so far the evidence is mixed. Stocks are displaying the hallmark signs of a test of a panic low, but there is a clear pattern of lower highs and lower lows. Another lower low, and the bear market thesis has to take precedence.”  These charts are just a portion of one of the latest fantastic reports. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.

***ALSO JUST RELEASED:  Fred Hickey – 7 Years Ago The Stock Market Collapsed 27% In Just 8 Days CLICK HERE.

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