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I smell what you're steppin' in 

to express your understanding for another person's thoughts.
Dude #1: I feel bad saying this, but Tim's sister is a total skank.

Dude #2: Yeah, I smell what you're steppin' in. I can't get rid of this aweful rash.

Dude #3: Yeah...wait. WHAT?!

I smell what you're stepping in

I understand what you are saying. This makes perfect sense to me.
Do you understand? I smell what you're stepping in.

I smell what you're stepping in. 

Yeah man, the shit is hydro, so it's a little 'spensive.
I smell what you're stepping in. Gimme 2 ounces.

I smell what you're stepping in. 

I understand what you're saying
-This place sucks
- Yea Dude, I smell what you're stepping in.