This little trick is something I really, truly, stumbled onto when I started my last sock—I started doing it because I am a tight knitter and I like my stitches to be small and neat, and it took me quite a while before I realized its potential to actually hide color changes.
There are a lot of different places on the net that will explain to you why and how jogs occur, but basically it comes down to: when we knit in the round, we’re not actually knitting in closed circles stacked on top of one another, but rather in a continous spiral. And when you stop working with one color in that spiral and switch to a new one, it causes a clear jump. Meg Swansen’s jogless jog is probably the most commonly used trick to avoid this jump; TECHknitter’s slip stitch trick is also quite useful. Both of these are more effective on thicker stripes, however. My trick is far less elegant than these two—like I said in my last entry, it’s stupid easy—but it is perfect for three or four row stripes.
Knit the first round with the new (cream) yarn, then—here’s the stupid easy part—take the old (green) yarn and tug the last stitch of the last round tight. Really tight. You don’t want the stitch to disappear all the way, but you do want it to come pretty close, because that is what will bridge the gap between the first and last stitch of the round.
After tugging it tight I usually twist it with the new yarn again at the beginning of each round, which helps to lock it in place and prevent it from loosening up again. The last stitch in the first round of the new stripe will automatically stretch out a bit to fill the gap, and you’ve got seamless stripes.