The second is mucher better, but I only see one problem.
The edges of the smudge are too crisp.

It makes it seem a part of the foreground when it is meant to be the background.
I blurred it ( Filter>Blur>Blur or Blur Tool ) then erased everything except the edges of the smudging.
Then got a black soft brush

and brushed the edges to blend it in more.

After a few gradient maps.
:] I'm assuming this is one of your first sigs, that's why I provided helpful pics.