The Palpable Fear in the Markets
Understanding the Fear in the Markets
by Robert Wenzel
With renewed economic uncertainty, American investors have withdrawn a staggering $33.12 billion from stock market mutual funds so far this year, reports NYT.
Over all, investors pulled $151.4 billion out of stock market mutual funds in 2008. The Flash Crash on May 6 of this year resulted in investors pulling $19.1 billion from domestic equity funds in May..
Investors withdrew $14.67 billion from domestic stock market mutual funds in July, the third straight month of withdrawals, according to the Investment Institute.
These withdrawal numbers support the Hindenburg Omen indications that the stock market has been climbing with less and less cash flow to support the advance. This, of course, suggests the potential for severe downside action in the stock market.