I am in search of the best trades on the short side. For instance with QQQQ now at 56.04, what would be the best trade to play the short side? If there is indeed a retreat, how deep would it be and how long would it last?
the simple trades would be long otm puts on spy, iwm, qqqq, or long calls on the vix. if we do not get a drop, the trades are 100% losers unless you do some kind of roll management. and then you keep losing and adding to the loss. i tried something like this last year (2010) with qqqq because gary shilling said the market was going to 666.
Markets may be on a parabolic. Look at the massive H&S bottom in QQQQ from April to August of last year. Watch out for more squeeze. We may be at the beginning of a new up cycle. The trend is your friend unless you have a good, logical short signal which I don't at this point.
What timeframe are you wanting to trade in? It doesn't look like you are interested in intra-day ... but are you looking for something that's days-, or weeks-, or months- ...?