As much as I would like to take credit for the following post, this is not my own skills I am passing on today. I discovered this lesson in knitting with 2, count them, 2 circular needles and I feel obligated to pass this information on. It is too good.
I don't want to get myself in trouble for cutting & pasting the thing without permission, so just in case here is a link to the page that I found. (Just want to be on the up & up.) =)
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How to knit small circumferences with two circulars
You don't need double-pointed needles to knit small circumferences like sleeves, gloves, socks, and the top of hats. Instead you can use two circulars, which cuts the number of joins down to only two.
A few people have claimed credit for this neat trick; I think it's one of those things that occured to multiple people about the same time. I learned how to do it by reading a magazine article written by Joyce Williams (Summer 2000, Knitter's magazine). This page is an attempt to demystify the process even further, it's amazingly simple once you understand the concept.
Select your needles
You can use two circulars of any length; 16" through 29" seem to work the best. The two circulars in the photo below are both size 5 but they are two different lengths.
I prefer to use two needles with different cable lengths so I can always tell at a glance which needle I'm holding. As an added bonus I own two needles in the same size yet two different lengths so I'm better prepared for future projects. I can use the 16" circular to knit the body of a hat and the 24"/29" to knit a sweater.
If your two circulars are identical in brand and length (which makes them impossible to tell apart) you can place a marker after a few stitches have been worked on the first needle so you know the circular with the marker is needle #1. If you don't like slipping a marker every round then you can attach a safety pin or scrap yarn to the side with the first stitch of the round.
Casting on
Cast on the required number of stitches onto one circular.
The following tip for making a clean join is from Cat Bordi's Socks Soar on Two Circular Needles, which contains several sock patterns written especially for this technique. The pink needle in the photo is actually a crochet hook, in case that wasn't obvious.
How it works
The concept is amazingly simple. You knit half the stitches on one circular and then knit the other half of the stitches using the second circular.
In the photo below the right-hand purple needle has been pushed through the first stitch on the left-hand purple needle. I am wrapping the yarn around the right-hand purple needle, just about to form the first stitch of the first round. Nothing tricky, this is exactly how you normally knit.
I want to be sure the first few stitches are snug against the background needle, to avoid ladders. After the first two or three stitches have been completed I can pull the background needle (in the photo above that is the green circular) so the resting stitches sit on the background circular's cable.
Slide the stitches waiting on the green circular's cable so they are resting on the left-hand green needle. Pick up the right-hand green needle and start knitting onto it. In the photo below three stitches have been knitted onto the right-hand green needle.
That's it! All you have to remember is that you pick up both ends of the same circular to work the stitches on that circular. Both ends of the other circular rest in the background until it's time to work those stitches.
If you're using this technique to knit socks you might find my Sock Knitting Tips page useful.
There is a variation on this technique that requires you to use one long (40") circular needle instead of two smaller circulars. The two techniques are similar, as you can see for yourself.