What are the “waters above the expanse” referring to?
When God creates the universe in Genesis 1, initially He creates planet Earth as a ball of water, which the Spirit of God hovers over (Genesis 1:2), and the rest of the universe is created from Earth. This is very unlike modern understandings of the universe in which earth originated as a late development from the rest of the universe. After creating light in Day 1, God in Day 2 creates an expanse out of the watery earth. This expanse is the sky, in which the birds fly (1:20) and even includes space itself, in which the sun, moon and stars exist (1:17). The waters below the expanse are clearly just the waters that remain as part of earth- which God will then in Day 3 create land out of. What though are the waters above the expanse? These waters are never referred to again in scripture, with the possible exception of Psalm 148:4. Some have suggested they were clouds which were created initially but then quickly dispersed in the succeeding events of creation, so that they did not exist any longer. Others see it as some kind of boundary to the entire universe which either might still exist or have now ceased to exist.
So how are these verses to be interpreted in the light of modern cosmological understandings? There are two broad Christian interpretations of Genesis 1- a figurative interpretation and a literal one. The figurative interpretation sees the whole passage as a poetic description of creation rather than a series of literal events which occurred. Under such an understanding, the events described probably fit in with ancient concepts of the universe, but the point of the passage is to poetically ascribe praise to God the one Creator who brought all things into being in an orderly way, not to give a scientific explanation of how God created the earth. The legitimacy of this approach is contested by many Christians today.
If these verses are to be taken literally, they suggest a very different understanding of creation than what is understood by secular scientists- that in fact, the universe had its origin out of planet earth which was originally a ball of water. Young Earth Creationists point to evidence of the existence of water throughout the universe as support to show that this premise is not unfeasible. See Evidence of a watery origin for the solar system , and Water Near Edge Universe Bolsters Creation.