There's nothing wrong with that. It's called cycling (among other things) It will do that basicly whenever your not accelerating hard. at WOT is when you want to see where the guage is at, then adjust your AFC accourdingly. What's happening is the ECU is leaning out the mixture to concerve fuel, then it needs to richen it, then it goes back to save fuel, and keeps going in that cycle.
One question for you now, does your guage lite up tons of lights at WOT at night or when it's cold? I have the same one and it does that, I think it's cuz the o2 sensor is not warm enough. But I tapped into the wire in the engine bay. Just looking for a confermation.
Mike