The MACD shows the difference between a fast and slow moving average based on the same price.

During rising markets the fast moving average will rise faster than the slow moving average resulting in a rising line above zero. The theory is that with a smaller number of closes in the fast moving average it will more quickly indicate the trend of the most recent market action.

A signal is generated when the fast moving average crosses the slow moving average. When the fast moving average is above the slow moving average the MACD is positive and when it is below the slow moving average the MACD is negative.

Essentially the MACD measures when two moving averages begin to move towards each other either from below or from above.  The purpose of the MACD is to see a moving average crossover developing when the averages start to turn towards each other rather than waiting for the actual crossover, by which time much of the market move may be missed.