http://earthsky.org/earth/can-you-ever-see-the-whole-circle-of-a-rainbow
"When sunlight and raindrops combine to make a rainbow, they can make a whole circle of light in the sky.
But it’s a very rare sight. Sky conditions have to be just right for this, and even if they are, the bottom part of a full-circle rainbow is usually blocked by your horizon. That’s why we see rainbows not as circles, but as arcs across our sky."
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http://en.wikipedia.org/wiki/Rainbow
"Another atmospheric phenomenon that may be mistaken for a "circular rainbow" is the
22° halo, which is caused by ice crystals rather than liquid water droplets, and is located around the sun (or moon), not opposite it."