Step 1

First of all create a new document 540 by 220 pixels and fill the background with a gradient from #d3ecff at the top to #ffffff at the bottom.

Step 2

Create a new layer (Layer > New > Layer) and select the elliptical marquee tool. Make a small circle and then add to it by holding down the shift key and making more circles until you have something looking like a cloud:

Step 3

Fill the selection with white (#ffffff) by going Edit > Fill with colour.

Step 4

Now we are going to give the cloud a little drop shadow so it is more visable at the bottom and looks a little 3D-ish.

Layer > Layer Styles > Drop Shadow. The colour there is #d3ecff.

Step 5

Duplicate that layer a few times so that we have a few clouds. Move them around the document leaving a space near the bottom for the text. To change the size of them go Edit > Transform > Scale.

Step 6

Next up we are going to be doing the text for the logo, the colour that I have used here is #78b5e3.

Step 7

We are going to be adding a reflection to our text to go along with our dreamy sort of theme, so duplicate the layer and move it below the original text layer.

Step 8

Then go Edit > Transform > Flip Vertical.

Step 9

Now go Filter > Blur > Motion Blur, with an angle of 0 degrees and a distance of 10 pixels. This should hopefully make the reflection more realistic

Step 10

Lower the opacity of the reflection to 30%.

Step 11

Add a vector mask to your reflected text and make a gradient from white to black within the text area so that it fades out (ie looks even more like a proper reflection :)).

Step 12

Now lets go back to our original text layer and make it look better by giving it a gradient overlay.

Layer > Layer Styles > Gradient Overlay.

Now you’re done and it should be looking something like this…