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Before Thursday's rally, investor fear was the highest it's been all year

CNBC logo CNBC 4/12/2018 Jeff Cox

Market fear hasn't been this high in more than a year, according to a poll of retail investors that came out before Thursday' big rally.

Bearishness on the weekly American Association of Individual Investors survey hit 42.8 percent in the most recent reading. That's come amid a year of wild fluctuations brought on by worries of trade wars, inflation and a wild political backdrop.

The pessimism level was last higher on March 9, 2017.

As expected, the bulls also were in full retreat, with just 26.1 percent of respondents saying they're expecting the market to be higher in six months. That was the lowest reading since Aug. 31, 2016 and represented a drop of 5.8 percentage points. The rise in bearishness was 6.1 percentage points.

Both readings were at "unusual" levels in their respective directions and consistent with turns in the market, according to Charles Rotblut, AAII Journal editor. In other words, a high level of bearishness often signals that the market is ready to move higher.

The results were for polling taken through Wednesday. On cue, markets staged an aggressive rally Thursday, with the Dow industrials posting a 1.5 percent gain.

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