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Step 4 - Soft Transition
As you can see on the photo above there is a harsh line between SKY and the rest of the image. To fix it add new layer mask to sky. You can find the button Add layer mask on the bottom part of the palette Layers.
Grab the Brush Tool (B), select some soft round brush, lower its Opacity on about 40% and pick black color. Make sure that the layer mask is active - click on the thumbnail of it.
If you're not familiar with how you can work with layer masks let me explain it to you. It's similar to what can the Eraser Tool (E) do - you can hide some parts with it. But in compare to the Eraser Tool (E) you can let these parts reappear whenever you want. If you want to have some part hidden you simply paint with black on layer mask, if you want to see it again you paint white on that area. You can't do this with the Eraser Tool (E), you can go back few steps (depends on your History settings) but you always loose also the progress you did so far.