Mommy and I can't quite remember exactly what Nonna was on a tirade about during this sequence, but it was definitely one of the two forbidden love affairs she created in her Sicilian brain about Josephine. Next time I will make sure to get sound bites.
Here, Nonna is doing a 2 part hand gesture. The first obvious, "to the moon" or hitler impersonation, is Nonna expressing "get out of here with your crazy self" because she is outraged by Josephine's seemingly loose behavior. The second more subtle aspect of this Sicilian hand gesture is, if you look closely, Nonna is giving the horns or "fare le corna."
Giving the horns has two meanings. First it wards off bad luck. When someone dies you give the horns. Rocco can be seen giving the horns while riding by cemeteries, which are plentiful in Queens. Makes sense. Giving the horns is also an insult to a man who is being cuckolded, and that man is called a "cornuto." You do not want to be called a cornuto; its very embarassing. Maybe here Nonna is referring to Josephine's boyfriend, whom Josephine is "cheating on" in Nonna's mind with either the fruit man or the doctor.