For more than a century, flags and lights were used to warn mariners of dangerous conditions. In 1989 the service was dropped … and in June this year, they started raising the flags again.
Here’s a summary of what the flags and the warnings mean -
Small Craft Advisory

Interestingly, this warning means different things depending on your location – here in SoCal it means Sustained winds of 21 to 33 knots, potentially in combination with wave heights exceeding 10 feet (or wave steepness values exceeding local thresholds).
Gale Warning

Winds 34 to 47 knots
Storm Warning

Winds over 48 knots
Hurricane Warnings
Only posted for tropical cyclones, soooooooo, not applicable here – HOWEVER
A SPECIAL MARINE WARNING is issued whenever a severe local storm or strong wind of brief duration is imminent and is not covered by existing warnings or advisories. No visual displays will be used in connection with the Special Marine Warning Bulletin; boaters will be able to receive these special warnings by keeping tuned to a NOAA Weather Radio station or to Coast Guard and commercial radio stations that transmit marine weather information.
Go to signals for the full story from NOAA.
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When I see the red flag flying and head out to sea I often wonder if I am sailing a small craft. The Coast Guard informally assigns this designation to boats with a total length of less than 10 meters (Wikipedia). Sailing a Hunter 326, I have often wondered if I am sailing on the edge of the advisory.
When I read Captain Dan’s Blog I decided to re-check the definition and was surprised to find that, according to NOAA who issues the advisory, there is no definition of a small craft. Basically, a small craft is a craft that should not be sailing under a small craft advisory. NOAA says that “there is no precise definition of a small craft. Any vessel that may be adversely affected by small craft advisory criteria should be considered a small craft. Other considerations include the experience of the vessel operator, and the type, overall size, and the sea worthiness of the vessel”.
The advisory is based on both the wind speed and sea condition. The wind speed and direction are variables that have a predictable effect on the operation of a sailing vessel and can generally be dealt with by sail trim and reducing sail area. However, the sea condition is not so predictable, especially when a small craft advisory has been issued for hazardous seas.
I found a link:
http://www.wrh.noaa.gov/wrh/03TAs/0311/index.html
that may shed more light on the subject. The article is very technical; but, the (A) Background, (G) Summary, and Appendix A give some very practical enhancements to the definition of a small craft sailing in hazardous seas.
By the way, a small craft advisory can also be issued for icy sea conditions. I am glad we don’t have to worry about that in Southern California. We have enough to handle in sailing the Santa Barbara Channel!
Reading the info in link that Dwight cited concerning the definition of small craft applies to us small Hunter sailors …. with one exception. Center of gravity and righting moment. We have a very low center of gravity and a very robust righting moment.
That said, it only means we’ll do better than say a Boston Whaler in high seas. We’re still handicapped and vulnerable because we are (relatively) underpowered.
Getting thrown back off a steep wave in a reverse pitch-pole is pretty hard to imagine if only because you couldn’t get out of the harbor if the seas were that extreme. Broaching at the bottom of a big roller is more likely, but if you’ve got the hatch boards in, the boat is fairly safe; however, your crew, if not snugly tied in is a risk of getting launched over the side.
All-in-all, our safety depends on our individual judgment of the hazards, our ability and the soundness of our craft.
Much as I don’t like to agree with Chris, it is a good idea to take a long, hard look at the conditions before you make your run past the breakwater. The Small Craft pennant should be a reminder to do just that. On the other hand, I wouldn’t do a 180 at the Harbor Master office just because the pennant was flying.