Property and casualty insurance stock investors need to focus on the industry's improving fundamentals, heading into a weak fourth-quarter earnings season.

Prior to Sandy's catastrophic arrival, Insurance Information Institute president and economist Robert Hartwig said that insured catastrophe losses were "down somewhere in the order of 50 percent" from the previous year. Factoring in an estimated $25 billion in insured losses from Sandy, Hartwig now estimates that insured losses during 2012 in the United States totaled $57.9 billion, increasing from $35.9 billion in 2011.

The 2012 loss estimate is "far above the 2000 to 2011 average loss of $27 billion (in 2012 dollars), according to the Insurance Information Institute.

Despite the "year-end surprise" from Sandy, Hartwig estimated that the combined property and casualty insurers had a combined ratio of 100 percent for 2012, improving from 106.4 percent in 2011. The combined ratio is the sum of incurred losses and expenses divided by earned premiums. It measures underwriting profitability, and a combined ratio of over 100 percent indicates an underwriting loss. An improved combined ratio for 2012, despite having such an unusual hurricane hit the Northeast, is a good sign for improved underwriting profit margins.

Everyone assumed that Facebook would announce something at its Jan. 15 press conference that could leave Google in the dust.

Instead, the company announced "Knowledge Graph Search," hereinafter known as KGS. It's a graphical method of developing searches on your own Facebook data and that of people you know. The more dependent you become on Facebook, the more friends you make there, the more value this delivers.

Your friends, photos, places, and interests can all become searchable with this, so the stocks most hurt by this announcement were those, like LinkedIn and Yelp, that specialize in compiling recommendations.

Uranium producer Cameco has run rapidly since November, and yesterday the options volume was bullish.

OptionMonster's tracking systems detected unusual activity in the February 22 calls, with the largest trade pricing for $0.70, and the March 22s, which went for $0.90. The volume was above the previous open interest at each strike, showing that new money was being put to work.

Calls lock in the price where shares can be bought and can provide significant leverage if the stock rallies. But these contracts will expire worthless in the absence of a move.

Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling — or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it is always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Goldman Sachs shares have been driving higher into 2013 on optimism of a recovering economy, investor inflows into stock markets and expectations that the standalone investment bank is well positioned for an eventual merger and acquisition wave.

While fourth quarter earnings are likely to show Goldman Sachs at the head of the Wall Street pack when it comes to underwriting and trading revenue, the bank still has room to prove to investors it stands apart from peers such as Morgan Stanley.

Notably, Goldman is one of just a handful of banks that's been able to deploy excess capital to reduce its share count in recent years, helping to return its earnings per share to pre-crisis levels, even if other metrics like absolute revenue and return on equity remain well below 2007 levels.

The iShares High-Yield Corporate Bond Fund doesn't show up on our tracking systems often, but yesterday it saw heavy option activity that signaled bullish sentiment toward the market.

Traders focused primarily on a select few strikes, starting with the June 95 calls, according to OptionMonster's tracking systems. They then shifted to the January 94 calls, which were sold, while the February 95 calls were bought as a bullish position was adjusted.

Calls lock in the price where investors can buy shares in the fund, so if it goes up those contracts will generate some nice leverage. But these options will also expire worthless if the stock fails to move by their expiration dates.

Capital One is ready to move beyond its year of acquisitions, cut expenses and reward investors, according to Goldman Sachs analyst Ryan Nash.

Credit card stocks are in a sweet spot, according to Nash, who said in a report on Sunday that "valuations remain very attractive," and that he expected the group to "see further outperformance in 2013," because "credit losses remain below normalized levels" and "superior capital generation drives higher capital returns for the group, with payouts surpassing 100 percent for some."

With the nation's largest banks now submitting their 2013 capital plans to the Federal Reserve as part of the regulator's annual stress tests, Nash said that card lenders "are in the best positions for returning capital," as the group has "a higher starting point, with an average Tier 1 common ratio of 12.4 percent (banks are at about 10.0 percent) and this matters greatly for these stocks as the cards generate capital much more quickly than the banks (260 bps vs. 75-90bp at banks on an annual basis)."

Buy-and-hold investors have crushed it with Intel. Granted, if you bought during the dot-com bubble during 2000, your portfolio may still be upside down, but maybe not depending on your use of option hedging and dividend reinvestment strategies.

Investors from $28+ in 2012 are enjoying a fat and rising dividend, while waiting for capital gains. For investors considering adding more shares or entering a new position, right now is an exciting time.

The earnings release is this week, and you can exploit elevated option premium to enhance your entry while at the same time lowering your risk.

Lowe's shares have never reached $40, but one long-term trader is betting that they will climb to that level by early next year.

OptionMonster's tracking systems detected the purchase of 5,000 January 2014 40 calls for $1.66 on Friday. The volume was almost five times the open interest at that strike before trading began, so this is clearly fresh buying.

Those calls lock in the price where investors can buy shares in the home-improvement chain. The options can generate significant leverage in a rally because of their relatively low cost, but their value will melt away over time if the stock fails to perform.

Banks are valued below historical norms and the worst of the new financial regulations are already done, and that has banking analyst Gerard Cassidy upbeat about bank stocks.

"We were bullish all of last year," Cassidy, of RBC Capital Markets, told CNBC's "Squawk Box." "We continue to be bullish this year due to the continuing improvement in earnings, coming from credit improvement and also loan growth."