Step 1:  Create a new 500px by 500px document with a white background (the size doesn't matter too much, but higher resolutions generally give better results). Press SHIFT + D on the keyboard to reset the foreground and background colours to white / black respectively.  Then choose Filter > Render > Clouds from the menu to add some clouds to the background layer.

Step 2:  Now for the fun part!  Select Filter > Liquify from the menu to load up the liquify dialog. Take a moment to familiarize yourself with the interface - there are lots of options which I will let you work out for yourself. Once you are ready, take a large brush and start smudging the clouds around.  The more you move the mouse, the greater the distortion, so go nuts!  When you are happy with the results, press the OK button to render the changes.

Step 3:   Looking good! All good abstracts need a little colour, though, so go back to the menu and choose Image > Adjustments > Hue/Saturation. Now all you have to do is click the colourize checkbox and vary the Hue setting until you find a colour of your liking.

Variations:  This technique may look rather simple but it is, in fact, extremely flexible.  If clouds aren't exactly your taste, try a multi coloured texture and see where that takes you... or even try a photo!  So go nuts, experiment as much as you like, and have fun impressing your friends with tons of trendy abstract designs.