The oscillator is a measure of the trend acceleration or deceleration.  As the speed of the price move increases, the moving average line, though lagging behind will also accelerate/decelerate.

The calculation for this oscillator is to plot the difference between 2 moving averages.

Presenting the data in this form has the advantage of highlighting the classic trading signals of a 2 moving average system (crossing of the "zero line").

Overbought/oversold situations are spotted when the short-term moving average moves too far above/below the long term moving average (=zero line), this short term variation from the long term trend usually announces a pause in the market until the short term moving average moves back to the long term moving average.

If the short term moving average bounces off the long term one, this usually represents a good buy/sell area in an uptrend/downtrend.

If the short term moving average crosses the long term one, this usually warns of a trend reversal.