Next stock market crash: Nervousness near 50-year high, 1987 parallels

The stock market may have hit a new record, but investor trepidation is still lurking under the surface. One measure shows it near its highest level in roughly 50 years.That's flashing some eerie parallels to the 1987 market crash, which featured the biggest single-day wipeout in history.Visit Business Insider's homepage for more stories.Don't let the stock market's fresh record highs fool you. Investor fear is elevated, and has been for most of the last few years.In fact, traders have rarely been this worried over the past 50 years — at least according to a gauge of investor trepidation maintained by the Leuthold Group.Now, that fear has clearly not kept equities from reaching all-time highs on multiple occasions. Some market experts actually argue the inherent skepticism that stems from nervousness has kept stocks from overheating.But there's one unfortunate and glaringly bearish comparison that can be made to a prior period — one that featured the sharpest single-day drop in stock market history: the great crash of 1987.As the chart below shows, the so-called worry gauge was in its top quintile during the period immediately preceding the 1987 meltdown. And wouldn't you know it, the measure is in that same quintile right now, and has been for some time.This is far from the first time the current stock market has been compared to the 1987 era. For years, market bears have cried foul on the fact that valuations right now are even higher than back then. And by some measures, they're the highest in history.With that established, those statistics and comparisons to 1987 certainly seem troubling. But the experts at Leuthold Group are actually quite constructive on the near-term future of the stock market.The firm points to other prior instances when the worry gauge was in its top quintile. The obvious examples center around the dotcom and 2008 financial crisis crashes. Leuthold points out that, on both occasions, stocks made their final peaks months later, leaving ample short-term runway. The clear takeaway there is that stocks could stay strong for a while longer.Leuthold's second argument in favor of near-term bullishness calls upon a long-standing market theme: the idea that stocks often climb “walls of worry.” What that means is that investor anxiety — the exact kind measured in the chart above — can protect equities from sudden sell-offs as they melt upwards.In the end, one thing is certain: a reckoning is coming — at some point. Leuthold's worry gauge can be interpreted in multiple ways because, like most metrics, it's not 100% infallible.That ultimately leaves open the very real possibility of a sudden, 1987-like collapse, even if that's not necessarily everyone's base case. And that fact alone should have investors shifting towards defensive positioning.