The firmament is the sky, i.e., the space between the land and sea below, and the clouds and stars above. To understand the notion at work here, remember that we are to imagine a world utterly beclouded, with vague light glimmering through, but lighting nothing in particular. Then, once the dust settles enough, on Day 2—although there might still be massive, impenetrable clouds of water vapor—water oceans might well become visible and distinguishable from the clouds.