"Fire Rainbow"

The image was captured on camera as it hung the sky above northern Idaho (near the Washington border) on 3 June 2006.

This is an atmospheric phenomena, a "fire rainbow." This one is not a hoax. Clouds have to be cirrus, at least 20k feet in the air, with just the right amount of ice crystals and the sun has to hit the clouds at precisely 50 degrees.
Sunlight entering the crystals’ vertical side faces and leaving through their bottom facesis refracted (as through a prism) and separated into an array of visible colors. When the plate crystals in cirrus clouds are aligned optimally (i.e., with their faces parallel to the ground), the resulting display is a brilliant spectrum of colors reminiscent of a rainbow.