What's the best way to profit from an expected short/middle term drop?

Perhaps a better question is, what is the best way to profit from a future drop in such a way that the cost is negligible if you're wrong?

I tend to agree that the short term is about as bullish as it gets--a gap up on an all time high day--so it's probably better to wait for a few cracks to appear. Breadth is quite poor given the level of exuberance, so to me it has a certain smell of "extreme bullishness for now, but perhaps later in the bull than you might otherwise guess".

I'm sure others can suggest better methods to decide when to place your bearish wager, but it's conceivable that good old NH-NL might even be useful as an input. e.g., at some point in February one might have decided that it had not only gone negative but decisively so. No matter when that month you decided that, it was a good time to sell for a little while : )

Jim