Two Reed switch in two way directions
Sorry, but your code is complete nonsense. The following code gives you an example. I have no access to a compiler at the moment, so there might be syntax errors and it is completely untested. Also, you gave no complete description of the things you want to do. e.g when to switch on the green LED or what the up and down variables are for. 

And there might also be timing problems. In order not to miss a reed state change,
you should avoid adding delays and slow serial print outs.

I'm pretty sure, I did your homework. So my advice is to learn programming and try to understand. Homework was not ( only ;-) ) invented to enjoy the teacher, they help you through tests. ;-)

Your problem is similar to the decoding of a rotary encoder, so information about this subject might help you also. 

const int REED_PIN1 = 2; 
const int REED_PIN2 = 3; 

// LED pins - active-high 
const int RED    =  9; 
const int GREEN  = 10;
const int YELLOW = 11;

int fixedState1 = HIGH; 
int fixedState2 = HIGH; 

void setup() 
{ 
   // If the pin reads low, the switch is closed.
   pinMode(REED_PIN1, INPUT_PULLUP); 
   pinMode(REED_PIN2, INPUT_PULLUP);

   pinMode(RED, OUTPUT); 
   pinMode(GREEN, OUTPUT); 
   pinMode(YELLOW, OUTPUT);

   digitalWrite(RED, LOW);
   digitalWrite(GREEN, HIGH);
   digitalWrite(YELLOW, LOW);
}

void loop() 
{ 
  // AS LONG AS BOTH SWITCHES ARE ON AT THE SAME TIME,
  // THE PROGRAM FLIPS OUT ;-)
  int reedState1 = digitalRead( REED_PIN1 ); 
  int reedState2 = digitalRead( REED_PIN2 ); 

  if ( readState1 == LOW &amp;&amp; fixedState1 == HIGH )  
  {
    if ( fixedState2 == LOW )
    {
      digitalWrite( RED,    HIGH );
      digitalWrite( YELLOW, LOW  );
      digitalWrite( GREEN,  LOW  );

      fixedState2 = HIGH; 
    }
    else
    {
      // setting the green LED is just a guess 
      digitalWrite( RED,    LOW  );
      digitalWrite( YELLOW, LOW  );
      digitalWrite( GREEN,  HIGH );

      fixedState1 = LOW; 
    }
  }

  if ( readState2 == LOW &amp;&amp; fixedState2 == HIGH ) 
  {
    if ( fixedState1 == LOW )
    {
      digitalWrite( RED,    LOW  );
      digitalWrite( YELLOW, HIGH );
      digitalWrite( GREEN,  LOW  );

      fixedState1 = HIGH; 
    }
    else
    {
      // setting the green LED is just a guess 
      digitalWrite( RED,    LOW  );
      digitalWrite( YELLOW, LOW  );
      digitalWrite( GREEN,  HIGH );

      fixedState2 = LOW; 
    }
  }
}