:/ Arms are still too long.
If you wanted them to be bending at the hips, then you better bend them more.

I tried copying this pose with my arms slightly bent, and they still made it to about my thighs not my hips.
I had to really bend my arms to try and get my hands to my hips, and that is why his arms are too small.

http://i45.tinypic.com/103zod4.png

Here's your banding issues, it's all pretty obvious banding.
When pixels hug each other like that it's called banding and it usually always looks bad.

I can take criticism, I usually do. Don't throw a fit just because I disagree with you. Holding my arms in that position, they only make it down to the hip. An elbow is a hard thing to sprite, especially on a small area. If I did include it it would've looked odd. Also I see no banding on my arms, if you do please point out where so I can fix it because I gladly would.

No, the arms are not fine.
What a horrible way to take criticism is tell the person they are wrong.

Also that is probably one of the worst guides for anatomy I have ever read.
I retract my statement, the muscle explanation is decent but the anatomy references are kind of sub-par.
There are better tutorial books out there.

www.orbitgoogle.com/Books/Medical/anatomy.jpg

Your arms are only making it to his hips :/
I know they are bent arms, but you also have no elbow, it's almost like a noodle arm.
So yea, they are too short dont tell me otherwise.

Also your arms have horrible banding of pixels.
And the more I look at it the more I start to dis-like the hands.

http://www.locustleaves.com/banding.png

No, the arms are fine. The wide pants probably make them look smaller than they are. According to this guide though they're fine.

http://cedarseed.deviantart.com/art/Big-Guide-to-Drawing-the-Body-15014442

Your arms are too short.
Same goes for the fire animation.

I think the head should have some motion. looks too how to say "not living" for my taste.

It's just supposed to be breathing, I'm scared if I add more motion it'll look weird

I still suggest more motion. Idk, it looks kinda weird without more motion