This is what I consider the third stage. I first block in my darkest areas. Then to add depth I add a little white to the main color, in this care Burnt Sienna and fill in the masses. Afterward, I add a little more white and create the highlights. You can really begin to see the horse as it is flushed out.
The next step, for me, is to sit back and look an take it all in before I proceed to the next stage. More than likely I'll block in the remainder of the background and water.