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Q: after removing and replacing the Distributor, how do you correctly Set the Timing? on 1990 Ford Mustang LX

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the car just seems to not be idiling properly. Haven't drove it for fear of causing more serious problems.
With #1 piston at top dead center on compression stroke, the distributor should be pointing at the #1 spark plug coil tower. That should get you close enough to start the engine, after which you will need a timing light to correctly set the ignition timing. If the engine won't run correctly with the distributor properly aligned then you should check the spark plug wires to make sure the firing order is correct.
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