http://img651.imageshack.us/img651/8914/74017412.png

Quick visual that I cooked up since so little information exists on this trick.

Also, there’s probably an easier way to do this, but this is the simplest.

Picture 1-6:
Black dot represents fixed anchor. Think of it as your hand.
Red/blue/green represent parts of the string. I used this primarily to show where the string overlaps itself in which order.
Purple is the yoyo.
Blue with yellow lines is the part of the string that the yoyo is catching onto.
Arrows show direction. Curved arrows should direction on a dimensional scale. Straight = left/right, Curved = towards you/away from you

Picture 1:
This is what your normal Ninja Vanish should look like. Creating the loop in such a way that the yoyo in positioned in the middle helps catch it. Natural movements of the slack and off a normal breakaway will cause the loop to go left and the yoyo to go right. This aids the catching.

Picture 2:
Shows contact of the string without gravity.

Picture 3:
Shows finished product with gravity.

Picture 4:
Same motion with wrist. Aim the loop this time so that it forms on the left of the yoyo. Natural movements of the slack and off a normal breakaway will cause the loop to go left and the yoyo to go right. You don’t want this. Use the same Ninja Vanish wrist motion while moving your arm to the right.

Picture 5:
While you are grabbing the yoyo, move your left hand right and your right hand left. Arrows are changed to better represent the direction. If seen from a bird’s eye view, your hands would be making a counterclockwise oval.

Picture 6:
Shows finished product with gravity. Laziness resulted in taking Picture 3 and reversing it, but it should basically be the same. String should have a twist in it, only noteworthy when dismounting to trapeze.