Thanks so much Ladies! I'm on a roll now. Teddy will have a hood.
So sorry for bothering you all with something that I should have known, and turns out I did know myself. I have always been underconfident about picking up stitches. The pattern always says to pick up and knit the stitches. I can't seem to do it that way, I pick them all up, then I knit them, then I go forward with the pattern. I am always worried that I am going to mess up the finished product by picking up stitches and it not looking nice then.
Oh well, the stitches are on now and I have an inch of the hood knitted, so .... hi-ho hi-ho, it's off to knit I go!