A unicorn sighting is something magical that happens or is witnessed, that is otherwise indescribable. Usually it is a so-bad-that-it's-good type of situation or circumstance that is witnessed.
"Hey, I just saw a clown walk up to a bar and try to order a 5 dollar drink with pennies, and it's 2 in the afternoon. That's like, I don't even know."
"I think you just had a unicorn sighting."