Risk remains in the financials, and that risk continues to expose itself with the larger-than-expected writedowns that Citigroup (C - commentary - Cramer's Take) announced over the weekend as its CEO departs.

The overseas markets also took large hits as Hong Kong's Hang Sang index plunged 5%, and the Shanghai composite tumbled 2.5%.

I still don't think anyone still really knows how far the subprime and credit problems really go, but I think that the market will eventually tell us when this mess is over. I know many investors and analysts continue to recommend that some of these companies are great buys now. However, I think the great buys will appear when nobody wants anything to do with the stocks.

The inflation debate continues. The confusion develops because many investors do not understand what inflation really is. The simplest and easiest explanation, and the first sign, is that inflation generally exists when companies pay higher prices for their products and services and then they pass along those increases to consumers.

The second sign of inflation is higher commodity prices including those for gold, silver, agricultural products and oil. If you use this simple economic lesson, you will never have to rely on an economist or the Fed to tell you whether or not there is inflation.

There are also other indicators, such as Treasury inflation-protected bonds (TIPS). These bonds have an extra ingredient that protects investors as inflation increases. You can see from the chart below that the iShares Lehman TIPS Bond Fund (TIP - commentary - Cramer's Take) has been steadily stair-stepping higher since July. On Friday, the price broke out into new two-year highs, and that may be an indication that inflation concerns continue to increase.

Source: TC2000

Another interesting chart that I found over the weekend was a Powershares Dynamic Biotech Portfolio ETF (PBE - commentary - Cramer's Take). The price recently corrected down to the 50-day moving average and successfully held that level over the past week.

On Friday, it reversed off of that support level and now looks like it is prepared to make another move higher. Investors have a nice support level under $19.25 to set a protective sell stop.

Source: TC2000

I think most individuals and investors will agree that the war against terrorism is probably going to last throughout our lifetimes. That leaves a long-term catalyst that continues to drive the investments and profits toward the aerospace and defense sector.

This sector of the market has been in a steady uptrend for quite some time, and if you look at the Powershares Aerospace and Defense ETF (PPA - commentary - Cramer's Take), you can see that it is probably setting up to make another move higher. In order for this to happen, investors should look for a strong break above $24.30 on heavy volume. A protective sell stop could go under the $22.90 level.

Source: TC2000