The light flashes exactly on the #1 spark fire. It makes kind of a strobe effect that freezes the balancer in your view. So you watch the balancer and the timing mark (a little silver piece of metal pointing over the balancer). It is probably best viewed looking down from standing over the passenger fender, or passenger side of the front bumper. Anyway, it's hard to get a good line of sight at the mark and get the light pointed right at the mark too.
What you are looking for is the position of your mark (or marks) in relation to the silver metal thing. Turn the distributor (slowly!) until you line the two up. A little nudge on the dist. makes a lot of timing.
By the way, be very careful around the accessory belt. You may need to move around a bit to get a good view, and when I try to do it, I find myself getting uncomfortably close to that belt!