6th April 2011 Horseshoe Orbit

I found this diagram most misleading as it looks like it is from the viewpoint of someone outside the bodies involved yet it is actually showing the relative position of the asteroid with respect to Earth and the Sun.

The asteroid is in almost the same orbit as earth. When it is in a slightly smaller orbit, it moves faster, catching up the earth. When it approaches the earth at A, it is pulled into a larger orbit (A->B->C) and thus orbits the sun more slowly, so that it falls behind earth.  Eventually, Earth catches up at D, pulling it into a smaller orbit (D->E) so that it speeds up and travels away from Earth.  At no point does it ever pass Earth in its orbit.

Universe Today Article

NASA: Animations of a Horseshow Orbit

Wiki: Horseshoe orbit