We can break this logic down to an "if, then" statement.
If this is Minute [ii], then Minute [ii] has reached a sufficient retrace range to be considered "finished".
If Wave [ii] is finished, then wave [iii] comes next.
If wave [iii] comes next, then it will be stronger than wave [i] and take prices lower.
That is where we are in the wave structure as far as EW logic goes. I did not trace the pattern, the market did. EW theory is a probabilistic theory. The odds of the pattern is based upon the strength of the underlying subwave structure. And right now the wave pattern has the "right look" of a 5 wave pattern down and a three wave pattern up. In this case the pattern is a Minute [ii] expanded 3-3-5 flat.
And other sentiment measures are right in line with a Minute [ii] peak. AAII and Market Vane via Sentiment Trader:
II survey also shows appropriate bullishness. This market is a ripe for a fall. Obama's declining ratings is a reflection of sentiment waning for many, many months. Something has to give.
And that may happen, I don't have a crystal ball. But all we can say is that the wave pattern is "setup" for a nasty wave [iii] down and a waning internals along with strong bullish sentiment gives a good deal of weight to this very scenario.