The “three bears forecast” for the FTSE 100 index worked well in signalling the potential for a strong rally off the August lows. Recent declines have resulted in the index again falling well below the forecast path – see chart. There is no shortage of reasons to worry, from the “credit crunch” to soaring energy costs, but global liquidity remains plentiful, offering significant support for equity prices. Let’s see if this latest buy signal works out.