Financial advisors are setting aside their doubts and embracing the recovery.

Advisors showed increased optimism about the state of the economy and financial markets in May, according to a survey released Tuesday.’s Advisor Confidence Index rose 5.6%, registering a 114.8 rating, well above the survey’s neutral benchmark of 100. The index surveys 130 advisors monthly about their confidence in the economy now, in six months, and in 12 months. It also gauges their outlook on the stock market over the next six months.

Buoyed by shrinking government deficits and improving housing and employment numbers, each of the index's four indicators rose in May, with confidence in both the current economy and the stock market increasing by 7%.

“This ‘head-scratching’ rally is no longer a mystery,” Jonathan Foster, president and chief executive officer of Santa Monica, Calif.-based Angeles Wealth Management, said in a statement. “The Federal deficit is vaporizing, and even California is now projecting a 2014 surplus. This is still the rally everyone loves to hate, but soon, even ‘recalcitrant retail’ may be rushing in to catch up.”

The results constitute a surprising turnaround from a month earlier, when advisors, skeptical of the stock market rally, caused the index to plunge nearly 6.8% to 108.7, the ACI’s lowest mark since January.

Despite the strong May results, the survey reflected some underlying pessimism. Advisors were less certain about how the economy would perform in six months or a year from now, as confidence in those categories rose by a mere 4.4% and 3.8%, respectively.

But such caveats aside, the numbers are moving in the right direction.

“The bears and their cash positions earning zero are getting pulled off the sidelines,” said Kenny Landgraf, founder, president, and chief investment officer of Kenjol Capital Management. “We expect a sideways market and then we will hit new highs in the fall again.”