Your project edge should look like this. We'll be working with that second row of knit stitches from the top. (The row of sideways "V"s second from the top.)
Insert your needle from front to back under the stitch closest to the cast-on edge. Treat this like a normal stitch & knit it. Proceed to pick up stitches as your pattern indicates.
Quick Note: I'm so sorry for the quality of the photographs, but I wanted to be sure to get this out in a timely fashion so I figured that this is better than no tutorial at all. Future tutorials will be better, I promise!
Knit at Nite MKAL Tutorial: Picking Up Stitches - Clue 2
Need a visual? Here's a quick photo tutorial for picking up stitches so that you can continue through Clue 2. If anything is unclear, please send me an e-mail so I can walk you through the steps. Happy knitting!
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Featured Yarn in this Tutorial
Wee Chickadee Wool Co. Sparkle Sock Yarn in Dewdrop & Song of the Sea (Fingering-weight)