Notice that in this picture you can see three signals;

1)The mast on the main line in the middle of the image, showing green.

2)The dwarf signal is for exiting the siding onto the main line. It is showing red because there is a train coming in from the left on the mainline.

3)Above the dwarf signal you can see the mast for the next block, showing green. This mast is next to a switch, the main line comes in from the right and splits, one line comes to us and the other heads off to the top left of the image. This is the throat of a balloon.