Well, I have never actually done this exact thing, but when I put something through the machine to gather it, the threads have to be adjusted so that it bunches up. I would hold onto the elastic and gently slide the fabric around. Otherwise, if it's supposed to shirr on the machine, make sure the fabric you are using isn't too heavy, your stitch length is set longer than usual, the tension isn't too tight, and you're only sewing one layer of fabric. That's the best I can do, sorry.
On the needles: Tempting for Kate, cabled jacket for Emma