From HCOB 21 July 1978 What Is A Floating Needle? (Tech Vol. II, p. 204) this definition of FN is also in the Tech Dictionary:

A floating needle is a rhythmic sweep of the dial at a slow, even pace of the needle.  That’s what an F/N is.  No other definition is correct.

From HCOB 2 August 1965 Release Goofs (Tech Vol. VII, p. 631)
:

The first goof relating to Releases is the one done for fifteen years — running past a free, floating needle on any type of process. THIS is the goof that held back all Scientology.  And if it continues to be done, known as well as it is now that you mustn't, one can only consider it suppressive — not just ignorant — as who now doesn't know you wreck a Release by running past the floating needle?