The mBB indicator is probably at its best when trying to identify when to sell something that is in a parabolic rise (or when to buy something that is in freefall). Typical moving averages are too slow to catch the movements, but the mBB seem to do a good job with $SPX. In the past, we’ve often looked at using the mBB strategy on something other than $SPX, but it never seems to work all that well, although our sample size is small. I recall that we attempted to use it on Apple (AAPL) as a buy signal last year.
Traders in all markets often attempt to determine if a rally or decline has moved "too fast". If a rally has moved "too fast" or gotten ahead of itself, one often say that the stock or futures contract is overbought. Similarly, if a decline has been "too steep", then the underlying security is oversold. The hard part comes in determining what is "too fast" or "too steep". There are many technical indicators that attempt to measure the rates of advances and declines in order to determine overbought or oversold.
