In most cases, you have all the stitches on one needle. Slip stitch 2 over stitch one, then slip stitch 3 over stitch one, then stitch 4 over and so on. This will gather the stitches together, similar to the way threading the yarn tail on a tapestry needle and then threading the tapestry needle through all the sts. Is that the way this bag is supposed to look at this point? Are you knitting in the round?