Bullish sentiment is just slightly above one standard deviation from the historical average and bearish sentiment is within one standard deviation.
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Placing asset categories on the efficient frontier requires knowing their historical average return and standard deviation.
Other measures also suggest sentiment is running hot, including the spread between bullish and bearish sentiment (37.6 percentage points) and the standard deviation (bullish sentiment is more than one standard deviation above the historical mean).
In statistical terms, optimism is more than one standard deviation above the historical average.
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Pessimism is more than one standard deviation above its historical average, which makes it unusual, but not extraordinary.
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Optimism is currently more than one standard deviation beyond its historical average, meaning that this is an unusually high reading.
It is also more than one standard deviation below the historical average of 30%, making this an unusually low reading.
Even with the decline, bullish sentiment is just slightly beyond one standard deviation of its historical norm, making the current reading atypical, but still not an outlier.
Bullish sentiment is now more than one standard deviation above its historical average, placing it above the typical range that has been registered over the course of the survey.
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Pessimism not only stayed at its lowest level since December 23, 2010, it also remained at a reading that is more than one standard deviation below the historical average of 30%.
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