The rotor does need to be aligned directly to #1 .
There are two marks on the balancer (1&4), make sure they are aligned as in the picture below.
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The rotor in the distributor should be aligned directly with the pointer that is cast into the distributor housing. If the rotor is pointing opposite the pointer, turn the crankshaft one full revolution and recheck the alignment. If the rotor does not point directly to the pointer, pull the distributor out and reinstall so it is correct.