What would need to happen to the SP500 for IBD to call anything a correction? Would that September low need to be undercut? Or is it X number of distribution days?

Then at that point we would need an FTD.

Also, does IBD use stage bases for indexes like we do with stocks?

For answers to these questions you may want to check out the webinar the MarketSmith Education Team did on conducting a "Daily Market Analysis." You can access the recording here: https://www1.gotomeeting.com/register/209365496