On Friday, a tornado warned thunderstorm was located in El Paso county, over NE Colorado Springs. While it did not produce a tornado, low hanging fast moving clouds were spotted.
SCUD: scattered cumulus under deck
These scary looking clouds sometimes precede a wall cloud or tornado formation, but are often misidentified as funnel clouds.
Scud is humid air condensing and being pulled into a storm within the "inflow" region. These clouds feed strong, maturing thunderstorms.
Wall clouds and funnel clouds and more organized areas of rotation and do not appear as thin and ragged as scud. BUT, they all form in the same area of the storm, the rain free base.
As you can see in the photo above, a wall cloud has a distinct shape and in person it will be visually rotating.
A funnel cloud is also very distinct and will be rapidly rotating.
The National Weather Service in Pueblo did issue a tornado warning for the storm in El Paso county because there was rotation indicated within the storm. Conditions will shift very quickly in a storm environment like this, so it was a good call made by the NWS, even though a tornado did not form.