I never heard of homosexuality as an actual instinct till I was over thirty . . Some might argue that this was merely defensive posturing on Lovecraft's part, and yet no evidence exists to indicate that he had any homosexual inclinations. But, this is not to say that his heterosexual inclinations were especially strong, either. Lovecraft, like many intellectuals, focused his attentions and efforts on mental, rather than physical, pursuits, and simply didn't have very strong sexual interests at all. In spite of this, these stories have been published as being authored by Lovecraft and Derleth, or, worse yet, solely by Lovecraft.
Chambers later uses the name as that of a city.
In fact, this quote did not come from Lovecraft, but from Harold Farnese, a brief correspondent of Lovecraft. After Lovecraft's death, Derleth wrote Farnese, asking if he could borrow the letters from Lovecraft. Farnese gladly agreed, and mailed the letters to Derleth. At no point in Lovecraft's tales does he give a physical description of the Elder Sign. He mentions it a scant four times, and these seem to imply that it is a hand gesture.