Santa Sangre (1989) is the scariest psychological horror film that I have watched in a while. I loved it! I didn't think it was freaking me out much until I finished the whole movie and had to quickly turn on the light. I'm still not sure what about it scared me so much. I think it was the overall bizarreness of the film that got to me.
Santa Sangre is about a man, Fenix, who is being confined in a mental institution. He is deeply troubled and behaves like an animal. However, through flashbacks of his childhood, when begin to understand why he has become unstable. He grew up in a traveling circus as a boy magician with circus performing parents. One night, his parents get into a fight after his mother realizes that her husband is cheating on her with the disgusting cobra woman. She reacts by throwing acid on him in a sensitive area, which causes him to freak out and slash off her arms and then he commits suicide in front of Fenix. Back in the present, we see that Fenix escapes the mental institution and rejoins his armless mother who forces him to become her arms.
This film is extremely twisted and it is not for the faint of heart. Do not watch it if you frighten easily or are quickly disturbed by bizarre scenes. I've seen some weird films in my life and this is one of the strangest I have ever watched. It is well done, full of emotion and it incorporates some dark humor at times, which is why I enjoyed it. If you are a fan of psychological horror films, then this is definitely a must-see.