The business as explained by LTS is a good way to do it--I am sure there are others, and the idea of checking with a magic shop for ideas is good, as well.

The key thing is, concealing and pulling out a ribbon or scarf to show blood(they did to good effect in "Chicago" too), is a fairly simple technical trick--it is up to the actor to make it real--

Way too often, even in professional productions, the effort goes into creating a "real" effect, and not into making moment emotionally believable--and you can do that without showing any blood at all--