In 1979, President Carter's administration ceased diplomatic recognition of the government in Taiwan as independent of mainland China, as the U.S. and China normalized relations.

The Chinese government has a "One China" policy, where the role of Taiwan is concerned. As for Taiwan, the "island province" is more than autonomous, the island has its own government and its own head of state.

That head of state, President Tsai Ing-wen placed a congratulatory phone call to President-elect Trump after his election in December of 2016. The acceptance of that phone call made headlines at the time. On Monday, news broke that the USS Antietam, a guided missile cruiser, and the USS Curtis Wright, a guided missile destroyer, had traversed their way through the Taiwan Strait.

I want you to understand this. This was no speedy drive by. This was a 16-hour trip, by two U.S. warships enforcing their right to travel international waters -- waters that China would obviously dispute the use of the word "international" as descriptive. The U.S. ships were shadowed by Chinese warships. This is cold war behavior. Been there, done that.

The entire defense sector reports this week. At least the big guys do. Margin compression and the potential for lost contracts weigh heavy on these stocks right now. This is one area where I will be slow to withdraw amid weakness. Domestic and allied monies intended for this space will not draw down in a Cold War environment.

Lockheed Martin (LMT) reports this morning. The numbers should be good. However, the firm has a number of deals in place with Saudi Arabia. My plan is to wait for the call before doing anything stupid.

Boeing (BA) , General Dynamics (GD) , and Northrop Grumman (NOC) all report tomorrow morning, while Raytheon (RTN) will go to the tape on Thursday morning. 

(Raytheon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells RTN? Learn more now.)

(A longer version of this column appeared at 7:49 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Stephen "Sarge" Guilfoyle, Jim Cramer and other experts throughout the market day.)

At the time of publication, Stephen Guilfoyle was Long BA, GD, LMT, NOC, RTN.