Stage 1 initiates when the EMA9 trend ends. Price then does the EMA Dance during which we keep playing for a directional move. Stage 3 initiates when the EMA Dance has played all its cards, and the EMA50 has failed its second break attempt. Therefore the final RT of the EMA Dance confirms stage 2 complete, and this is where stage 3 starts.
I have visualised this in the chart below. Stage 1 starts at the low, and doesn’t shift place if that low undercuts. Stage 2 ends when the final RT in the EMA Dance has failed to produce a directional move.