It's a lunar halo. See http://www.astropix.com/HTML/G_MOON/MOONHALO.HTM. A Blue moon is a folks expression to refer to the second moon in the same month. It only happens once or twice a year, hence the expression "Once in a Blue moon" In the 21st century, according to folklore, the name Blue Moon has two meanings. A Blue Moon can be the second full moon in a calendar month. Or it can be the third of four full moons in a single season. There will be two full moons in August 2012, the one on the 31st will be a Blue Moon.