Confused about socks

Ok so I printed out the sock tutorial from www.cometosilver.com/socks/printready/print/htm

I did fine untill I got to step seven.

I don’t understand how your suppossed to insert the needle and knit it so that the loop stays on the working needle. I tried to figure it out with the pictures and I couldn’t. Can anyone help?

It looks like your basically picking up stitches along the edge.