when should i use capital letters?

An often-asked question! Allow me to paste/update from a previous reply:

I cap important actions or objects to suggest (without using frowned-upon camera directions) that maybe a SHOT or C.U. or ANGLE ON might be nice, e.g.

As Von Hassel brushes past him, Jake SLIPS THE LETTER into the German's pocket.

Mike opens the drawer. Inside, a BLOODY KNIFE.

Vargas shrugs as if he's easing sore muscles. The motion exposes the .45 AUTOMATIC under his armpit. The Bartender loses his attitude.

-Derek
My web page - Sci-Fi, Fantasy, Horror - published fiction and WIPs.
Take the critiques you get with a grain of salt. Invariably, some of the critics will be kooks, bitter curmudgeons, or complete fools. ~odocoileus

"He slams the rock into the bucket and waves of water splash out."

Should i capitalize "waves of water" or "splash"?

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If you twisted my arm, I'd maybe suggest SLAMS is the action verb that invites capping. Tho' truthfully I don't feel the need to cap anything in your example, but that might have something to do with the fact it contains relatively insignificant actions involving small objects. If we were talking about something bigger, e.g.

The 18-wheeler truck smashes into the armored car, crushing its side like paper.

...then I might be inclined to cap a couple of words to emphasize the impact/shock/noise, e.g.

The 18-wheeler truck SMASHES into the armored car, CRUSHING its side like paper.

Re your example, if you want to draw more attention to particular actions, an easy way is to break your sentences up to make them shorter and snappier, e.g.

He slams the rock into the bucket. Water splashes everywhere.

(Apologies for the edit, "waves of water" seemed excessive. ) Whichever way you write it, it's unlikely to cause someone to throw your script out the window.

-Derek
My web page - Sci-Fi, Fantasy, Horror - published fiction and WIPs.
Take the critiques you get with a grain of salt. Invariably, some of the critics will be kooks, bitter curmudgeons, or complete fools. ~odocoileus

I'm siding with D.

You'll want to cap the most exciting part of the sentence and what you want the focus of the camera to be.

Remember to use this sparingly and consider other options like creating more sentence fragments.

When I took screenwriting 1 I was told to get a formatting book by Cole/Haag(The Complete Guide to SCript formats-Part 1 The Screenplay).

This was gone over in class also.

SCENE HEADINGS, FADE IN AND FADE OUT, AD LIB, TITLES OF SONGS, BOOKS OR MOVIES THAT APEAR IN DIRECTION, BEGIN END TITLES, VOICE OVER when stated in direction, FREEZE FRAME, enters and exit aren't capped, O.S., V.O., INTRO. OF NEW CHARACTERS, CHARACTER HEADINGS OVER DIALOG.

Last but not least SOUND CUES:

When the charater makes a sound (ex: he caughs, he slams), it's not in caps.

WHEN IT'S AN OUTSIDE SOUND(EX: Thunder BOOMS, guns FIRE) ALL CAPS ARE USED.

Okay I CHEATED, still have the book with me. A few things I didn't mention here have changed, but the screenwriting software, will take care of that.

Oh yeah, I dare not mention CAMERA ANGLES, it's a NO NO 4 now.

Hope this helps!
Jennifer

Eg. Does "missile" or "rockets" deserve the caps, or does neither?
"A pod opens and a missile rockets through the water."

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Either, neither, I'm shrugging. Maybe depends if there's a dramatic reveal, that kind of thing, e.g.

A pod opens. Inside, A MISSILE. Whoosh! It launches upward, breaks the surface, blasts up into the sky.

Or if it stays in the water, it's probably a torpedo.

Shrug, I'm just saying. Use the Force to guide you.

-Derek
My Web Page - naked women, bestial sex, and whopping big lies.
Take the critiques you get with a grain of salt. Invariably, some of the critics will be kooks, bitter curmudgeons, or complete fools. ~odocoileus

What D

is wonderfully DEMONSTRATING
but not explaining is how the sentence structure and writing stlye can be used for effect.

Random, you're just thinking too narrow. Too obvious.

Mix your sentences up. Play with your wording.
Use fragmented sentences, use line breaks and line spacing, etc.

And then, read scripts.
Study several different writers.
Try to notice how they handle different situations.