This is my variation on a free pattern from the Craft Yarn Council of America. I used a different yarn, needle and gauge, added some shoulder shaping, refined the increases and changed the bottom edge.
SIZE Medium (34/38" bust)
6 hanks Knit One Crochet Too Tartelette (50% cotton/40% tactel/10% nylon; 50 grams/75 yards) or 400-500 yds. similar ribbon yarn
2 yards coordinating 1/2-in. or 5/8-in satin ribbin
24" US13 circular needle
CAST on 52 stitches. Place marker for beg of rnd, join, and work in K1, p1 rib for 2 rnds.
Eyelet rnd: *K2tog , yo; rep from * around.
Work 2 more rnds k1, p1 rib, placing additional markers after 13th, 26th and 39th stitch.
Next 8 rows:
Odd rows: K to one st before marker at 13th stitch, inc 1, k1, slip marker, k1, inc 1, K to one st before marker at 39th stitch, inc 1, k1, slip marker, k1, inc 1, k to end of round, stopping before last stitch before beginning marker.
Even rows: Inc 1, k1, slip beginning marker, k1, inc 1, knit to one st before 26th stitch, inc 1, k1, slip marker, k1, inc 1, k to end of round.
Knit next round with no increases, removing second and fourth markers.
Next round, increase at front and back only.
Continue alternating a plain round with an increase round.
Work to desired length; I had 204 stitches, and my poncho measures approx. 25 inches at points and 20 inches at sides.
Work two rounds k1 p1 rib.
Work one eyelet round.
Work one row k1 p1 rib then bind off in pattern.
Fringe, if desired.
Here's how I made looped fringe, which I found a good choice for ribbon yarn: Secure one end to the poncho's lower edge with a safety pin, leaving a tail to weave in.
Pull uniform loops, from front to back, through eyelets, knotting two adjacent loops together on the inside of the poncho.
Weave in ends.
Lace satin ribbon through neck eyelets; trim to desired length. Tie in bow and wear your poncho with pride!