The Gold Stock Oscillator is built from thirty-six US exchange listed senior, intermediate and junior stocks. Each day after market close the database is updated and scanned to determine how many of the stocks are above their 50 day simple moving average. Each day's answer is used to recalculate a 20 day simple moving average for the tally of stocks closing above their 50 day simple moving average. That is the green line you see on the chart. When that green line drops below a reading of 9 and starts up again, I use it as a low risk intermediate term entry point into gold stocks that I like. (Don't be bullheaded about that 9 level, the idea is to catch a low risk entry on an intermediate term basis). When the 20 day simple moving average gets over 26 I become cautious and start thinking whether to sell out, sell calls, or do nothing. That's because risk to gold stock prices is high on an intermediate term basis.
This isn't a magic bullet that works 100%. Nothing is. Use it in conjunction with other TA like RSI, MACD, etc. to help with the read on risk.