I get how it is worked now. But if you are working short rows you are really working flat and not in the round. I've just been doing a sleeve with a short row cap (totally different set up, but still short rows) and I am using dpns to work the short rows, I was wondering if a person could do short rows on a ML needle. Probably, but I have never tried it.
The stitches you had on the holder are the main part of the sleeve and the 10 you pick up are at the underarm, so right in the middle of those 10 stitches will be the very middle of the underarm. When you get to the point where you are actually working in the round that point would be the beginning of the round. If the short rows are worked from that center point (under the arm)back around to the center point again, I would assume you want to put all those stitches on your long needle and then pinch it to divide into two sections at the center of where the shoulder would be. I'm not exactly sure how short rows will work when you aren't working around, but back and forth, but give it a try. I know it works over dpns. Let us know if you figure it out.