Nicknamed the "fire rainbow" because of its fiery rainbow colors, this apparition in fact has nothing to do with either fire or rainbows. It is caused by sunlight refracting through plate-shaped ice crystals in cirrus clouds. The geometry of the refraction requires that the sun be high in the sky (above 58o), which explains why this is a summertime phenomenon.
June and July are the best months to see circumhorizon arcs. Look for them circling the horizon sometimes in patches, sometimes not, always brightly decorated with pure and well separated prismatic colors. You'll know it when you see it.