The Pequod passes the Bashee isles and heads into the Pacific Ocean, which Ishmael remarks upon for its calm and “serenity.” Ishmael notes that Ahab stands looking out at the Pacific, but does not seem to notice its calmness—instead, Ahab believes that the White Whale is to be found in that ocean, and he calls out to the crew that Moby Dick “spouts thick blood,” and lies ahead of them.
What Ahab sees is determined not by the external world but by his internal world. He looks at a calm ocean, but sees only the tempest within. In the previous chapter Queequeg wrote his "book" on his coffin. Ahab, meanwhile, is also writing a book, which holds Moby Dick and him at its center, with everyone else a minor character.