I'm playing Oblivion.
I saw what was apparently a thief or something walking while crouched. He tried to pickpocket someone and was seen. A guard came and they fought. I took out my sword and went to help the guard, but as I got close the thief ran away. I followed the thief in the gate of the nearby town. As I approached him my cursor changed to the speak cursor but had an arc or arch over the top. I did speak with the thief and even afterward his cursor had an arc over the top.
Seems I've seen that arc before but didn't pay that much attention. Maybe in combat. Maybe the arc is sometimes small and sometimes larger.
What is that arc?