As Train Nut posted above, the insulated rail by itself can automatically complete a circuit, in this case to turn on the red bulb (LED), but it can NOT OPEN a circuit to turn off the green bulb. You need a relay*. This has been discussed on here quite a bit. Do a search for 153 Block signal wiring.
And do use auxiliary power, not track power.
Bill
* yes I know there is a way of doing it without a relay but as I recall it's much more complicated than using a relay plus it really doesn't completely turn off the green light it just dims it.
My response above was obviously based on a #148 signal without a built-in relay as I also was not aware that Lionel ever made a 148 dwarf signal with a built-in relay. It seems like there is not much room inside the housing of a 148 to add anything but with modern electronics I guess its possible.
I looked up the current model of the 148 dwarf signal in the 2018 catalog and it has catalog number 6-12883. I’ve got several different versions of the 148 installed on my layout including postwar, MPC and some more modern ones that were bought a few years ago. Those most recent ones are also catalog #6-12883 based on the number printed on their boxes. AFAIK they don’t have built-in relays as they came with 153C contactors in the boxes. Plus the instruction sheets that came with them (sheet #71-2883-250 dated 7/04) state that you have to have a 153IR or a 153C to operate them.
Therefore I’m confused - did Lionel add a relay to this accessory and NOT change the catalog number? If so, when did that happen? That’s a fairly significant change that should trigger a new catalog number.
Also I see that Lionel still puts the red LED on the top rather than on the bottom. I’ve reversed the bulbs on all of my block and dwarf signals to agree with the prototypical green-on-top railroad format rather than the red-on-top automobile street and highway format.
Bill