The stock market’s recent fluctuations have forced active investors to take a more neutral outlook on performance over the next six months, according to the latest Charles Schwab Active Trader Sentiment Survey.

Twenty-eight percent of the 500 active traders surveyed expressed a bullish outlook for the market over the next six months, down from 50% in Schwab’s December survey. About half (51%) are neutral and 21% are bearish, compared with 35% and 14% respectively in December.

As traders become less bullish on market performance they are turning their focus to portfolio protection and hedging against perceived risks. Forty percent of those surveyed by Schwab report they are trading options, with 74% indicating that they are doing so primarily for potential income generation or risk management, rather than speculation.

Randy Frederick, director of trading and derivatives for Schwab [SCHW], is not surprised by the survey’s results. After the market’s remarkable 13-month run, experienced traders would be expected to start pulling back. Frederick said that despite coming out of an almost unprecedented recession, the current cycle is not historically different.

“It looks similar to classic cycles and what sectors tend to lead us out of the recession and how the job markets lags,” he said. “It may have been more severe but it’s not that different.”

Along those lines, financials, which tend to lead a bull market rally, experienced the biggest drop-off in bullish sentiment of any sector. Fourteen percent of traders are bullish on the sector, versus 29% in December. Traders are most bullish on the technology sector (36%).

Frederick said that despite active traders becoming less bullish in their outlook for the next six months, this does not mean that the bull market has come to an end. It just means that the gains in 2010 won’t be as substantial as last year.