Adjusting the light levels makes it look like this:
The rainbow is in the cloud.
Belinda found a name and explanation for this and another photo at NASA.
"They're called iridescent clouds. A relatively rare phenomenon known as iridescent clouds can show unusual colors vividly or a whole spectrum of colors simultaneously. These clouds are formed of small water droplets of nearly uniform size. When the Sun is in the right position and mostly hidden by thick clouds, these thinner clouds significantly diffract sunlight in a nearly coherent manner, with different colors being deflected by different amounts. Therefore, different colors will come to the observer from slightly different directions."
I don't know how you feel about it, but I don't find this explanation really helping much. I guess it's the "nearly coherent manner" that's throwing me off. Luckily the NASA site has a link to this site at the University of Wisconsin. I was a little discouraged by the introduction:
"To understand this phenomenon let's review the four basic theories of light. Each theory was derived at a different point in time and each has its advantages and disadvantages. None of the theories are completely satisfactory in that they can easily explain all the behaviors of light."
The article goes on to describe The Corpuscular Theory of Light, The Wave Theory of Light, The Electromagnetic Theory of Light and The Quantum Theory of Light. It turns out that iridescent clouds are best explained using Wave Theory. This is good 'cause it's the only one of the four that I know anything about.
I understand constructive and destructive interference, when two wave lengths are in-phase or out-of-phase. And I remember diffraction from high school physics.
"To summarize--light bends around objects (diffraction), how much it bends depends on the wavelength, white light is composed of all colors and each color has a different wavelength and therefore is diffracted by a different amount. When the light from the sun interacts with cloud droplets diffraction occurs--the light bends around the edge of the cloud droplet. Different colors are diffracted by different amounts and are therefore in-phase (and out-of-phase) at different distances from the sun. The color bands result as different colors are removed from the sun's light due to destructive interference, while other colors are enforced due to constructive interference."
So, as I understand it, diffraction (different wavelengths bending differently) makes the colors visible and constructive interference (when are in sync) makes the colors bright. I might be able to repeat this explanation tomorrow, but I hope I don't have to actually explain it to anyone.