How to make floating objects

There is a nice Bukkit plugin names ShowCaseStandalone that allows what you want.

Otherwise, there is a second solution. As explained by Skylinerw on minecraftforum.net,

You can summon the item entity riding an invisible armor stand that has NoGravity set to 1:

/summon Item ~ ~5 ~ {Item:{id:minecraft:stone,Count:1},Riding:{id:ArmorStand,Marker:1,Invisible:1,NoGravity:1}}

You dont even have to use a plugin, you can do that with commands. There is a really good editor which generates the command for you: http://haselkern.github.io/Minecraft-ArmorStand/

In your case there are 3 Armor stands with diffrent arm positions, all of them are invisible holding a Iron sword.