From what seems simple it sure is hard to get a clear answer to this question. So I made up this picture so it can talk for me since I must be retarded. All I want to know is where the wire goes?
Its the wire in the center of the yellow circle. Thanks.
It used to connect to the negative terminal of the battery. Since it appears that someone has put a larger cable going to the negative terminal (marked as 2 batt gnd in your pic) the smaller cable was no longer needed, so someone cut it off.
The picture shows the common ground point for the battery , computer, & extra 3G alternator ground wire as described above in paragraph 2. A screwdriver points to the bolt that is the common ground point.
The battery common ground is a 10 gauge pigtail with the computer ground attached to it.
Picture courtesy timewarped1972
Correct negative battery ground cable.
The computer has its own dedicated power ground that comes off the ground pigtail on the battery ground wire. Due to its proximity to the battery, it may become corroded by acid fumes from the battery.
In 86-90 model cars, it is a black cylinder about 2 1/2" long by 1" diameter with a black/lt green wire.
In 91-95 model cars it is a black cylinder about 2 1/2" long by 1" diameter with a black/white wire.
You'll find it up next to the starter solenoid where the wire goes into the wiring harness.
It used to connect to the negative terminal of the battery. Since it appears that someone has put a larger cable going to the negative terminal (marked as 2 batt gnd in your pic) the smaller cable was no longer needed, so someone cut it off.
So the larger ground wire in the pic that "J" posted above was added when the 3g was added. That would mean that had my car been stock, no 4 gauge wire would have been present at all. Well I guess I need a bigger alt like so many have said. Its just strange to me that it worked for years with the 65 amp alt and now it wont.