Here's what you want to do (make sure you understand "short rows" before attempting this feat!).
- After seaming the armhole, use a circular needle and begin to pickup stitches around the armhole, starting in the center of the underarm bound-off stitches. Pickup stitch-for-stitch on the bind-off edge and any decreases for shaping; then pick up 3 of every 4 on the vertical edges.
- Count the number of stitches. Say you've picked up 72 stitches total. Divide by 3 (yes, you will be using lots of math in knitting, sorry!). This gives us 24 stitches.
- Now we're going to start short-rowing the sleeve top:
-- knit the first 24 stitches, place a yarn marker, knit the next 24, * put yarn to front, slip next stitch, put yarn back, turn * (from * * is called wrapping a stitch) and purl back to the yarn marker.
-- wrap the next stitch, knit back across ending with knitting the stitch you wrapped in the previous knit row (now you've knit 25 stitches)
-- continue knitting in this way until you've knit all but the bound off stitches, then you're done short-rowing and you'll work even for a row or two on all 72 stitches.
- Work even for an inch than begin decreasing evenly both sides every 4th row till your sleeve is the length you want....
You can do the same thing to make a cap-sleeve by increasing by 2 or 3 each time before you wrap the stitch....