Apply the Wave Filter ( Filter > Distort > Wave ) using the settings shown in the image to the left.

Keep pressing "Randomize" until you get a preview of a wave that you like (I kept pressing "Randomize" until I got some nice loops).

You should now have something like the image to the right.

Colorize the image using the Hue/Saturation window ( Image > Adjustments > Hue/Saturation ). Use the settings on the left.

Duplicate the layer (it should be the only one on the layer palette) and set the new layer's Blending Mode to "Overlay".