Starting at neck edge, with MC, Base Ch/Sc 36. Fasten off MC.
Row 1 (RS) Join A in first sc, ch 3 (counts as dc), dc in each of next 35 sc; turn 36 sts. Fasten off A; join B.
Row 2 With B, ch 3, skip first dc, dc in each of next 34 dc, dc in top of turning ch; turn. Fasten off B; join MC.
Rows 3-15 Repeat Row 2, working in the following color sequence: 1 row each of MC, C, D, MC, E, F, MC, C, D, MC, A, B, MC. Do not fasten off MC.
Rotate and work across short edge of Large Rectangle. Ch 1, working in row-end sts, work 20 sc evenly spaced across short edge. Fasten off MC.
Row 1 (RS) With RS facing, working across opposite side of Base Ch/Sc at neck edge, skip first 18 sts, join D in next ch, ch 3, dc in same ch, dc in each of next 16 ch, 2 dc in last ch; turn 20 sts. Fasten off D; join C.
Row 2 With C, ch 3, skip first dc, dc in each of next 18 dc, dc in top of turning ch; turn.
Rows 3-11 Repeat Row 2, working in the following color sequence: 1 row each of MC, F, E, MC, D, C, MC, B, A.
Fasten off A; join MC.
Row 12 With MC, ch 1, sc in first dc, sc in each of next 18 dc, sc top of turning ch; turn 20 sts. Fasten off, leaving an 18" [45.5 cm] tail for sewing.
Weave in ends. With RS facing, matching sts across last (sc) row of Small Rectangle with Edging on short edge of Large Rectangle, using tail, sew back seam.
NECK EDGE (optional)
Note Neck edge is very stretchy. If your shoulders are narrow or you want a more manageable neck, feel free to work the following round with a smaller hook and tighten up the neck as desired.
Round 1 With RS facing, join MC in first st on neck edge to the right of back seam, ch 1, sc in same row-end st, sc in each of 18 ch across neck edge of Large Rectangle, work 17 sc evenly spaced across 11 row-end sts on side edge of Small Rectangle; join with slip st in first sc 36 sc. Fasten off MC. Weave in ends.
Cut remaining yarn into 20" [51 cm] lengths, 100 assorted strands (at least 25 in MC). Using 4 strands for each Fringe (include 1 MC strand in each), attach 1 Fringe in every other row-end dc on right side of Poncho and in every 3rd space between sts across left side of Poncho. Attach Fringe as follows: hold 4 strands of yarn together and fold in half. Use crochet hook to draw fold through edge of Poncho, forming a loop. Pull ends of fringe through this loop. Pull to tighten. Trim fringe even.