Yes, both valves will be closed. Take out the #1 spark plug and bump the engine over slowly. Stick your thumb over the spark plug hole and as the balancer approaches the TDC mark on your timing tab, you will feel compression trying to push your thumb away from the plug hole. This happens only on every other complete revolution of the engine, so if you don't feel the compression on it the first time around, you'll need to catch it on the next one. At this moment, turn the balancer to align the timing marks on your balancer/timing tab, then remove the distributor cap to verify it is in phase with the cam. With the balancer still at TDC, if your rotor isn't aligned with #1 on the cap, then align it at this time either by removing and re-indexing into the engine or by turning it clockwise/counterclockwise it you have enough travel with it.
