The Volume Oscillator is identical to the Price Oscillator (PPO) except we are obviously dealing with volume, not prices.
Since volume is so closely watched by traders to confirm or not confirm a price move, traders use the PVO to determine if volume momentum is increasing or decreasing.
When the PVO crosses up over the zero line, it indicates shorter term volume is moving up in relation to longer term volume, but if the PVO crosses down below the zero line, it indicates shorter term volume is falling off compared to longer term volume.
Here is an example of how PVO can be used when a negative divergence forms. As GE was moving up, volume was falling off, so the Volume Oscillator moved down. Although we would not necessarily recommend going short, the divergence is enough to raise a red flag if you are long.