There are 2 ways you can make clouds using the scalloped circle punch. The first way is essentially inking the sky, using the clouds as a mask. For this technique you're using blue ink or chalks, not white. Use your scalloped circle, and push the ink from the circle to the card. You'll want to work in small segments, and change the angle of your circle each time you ink, so your clouds don't all look like little cupcake tops! It does take a little practice. I usually start at the top of my piece, and work down - a row of clouds at the top, then another slightly below... if you're wanting lots of clouds, this way you can see where you've been and keep your sky more balance. Or sometimes just one row of clouds at the horizon is enough. Here's an example.
For darker pieces, like in this card here, I create the clouds using the sky as a mask. This uses a piece of cardstock from which you've cut a scalloped circle. For this technique you'll be using white ink. Move the ink from the mask to the card. Again, you'll want to work in small segments, and change the angle of your circle each time you ink. Start at the bottom and work towards the top, so you can see where your other clouds are. The ink I'm using here is Versamagic Chalk ink, in the Dewdrop form. Love it!
Hopefully this helps! Thanks for asking!