You are misreading the pattern. The pattern reads...
CO 106. Pattern is a multiple of 4sts with 2 selv sts (1 on each end).
All rows: K1, *K2, yo k2tog; rep from * to last st, K1
You should be knitting 1 st, then working the repeat, then knitting 1 st. Maybe this will help
All rows: K1, (K2, yo, k2tog) repeat to last st, K1.
For your CO of 106 sts, you should be working the repeat 26 times between the 2 end sts.