When it was still drivable, my '87 did the same thing. Flicking the gauge face (well, the lens) when it was reading high would bring the temp back down to a much-more-believable indication. This led me to believe the gauge itself was failing somehow, so it was the impetus I needed to decide on a custom dash with Autometer gauges across the board (once the project is moving again...).
More on topic, how old is your thermostat and coolant temp sensor? How's the wiring for the CTS?
More on topic, how old is your thermostat and coolant temp sensor? How's the wiring for the CTS?