I used to watch it from an area right in front of the teacups next to the Matterhorn, which worked when it wasn't too busy.
During the holidays, I found an area beside IASW that worked when it was crowded. It's on the steps closest to the gates where the parade started/ended. It's directly above were the people who took the tour got to sit in chairs. You really have no one in front of you because of the height advantage, and if the parade starts in Fantasyland, you can make a quick exit after for rides.