Ok, glad we know its a 2f. Now, you are confusing things a little by talking about the # on the cap. At TDC compression the #1 piston is all the way to the top. The #1 piston is closest to the radiator. At TDC the rotor points as the image I posted earlier ...between 3 and 4 spark plugs. Forget about the #s on your cap for now. your dizzy rotor should point as the image shows and the flywheel indicator points to the TDC line, then you are TDC on the Compression stroke. You can confirm by removing the #1 spark plug and probing inside with screwdriver to see that the piston is all the way to the top. With someone holding the screwdriver straight up and down and touching the top of the piston, another person can turn the crank by hand, or pull the flywheel back and forth just a little. this will move the piston up and down a little and you can confirm that the piston is at the top.
If you are doing a valve job while the motor is not running, you'll need to put the motor on TDC compression stroke and adjust the valves specified. Then other valves are adjusted when you rotate the flywheel around again and get on the line but the rotor is pointing away from the motor.
If you are just working on the dizzy and have to pull it out, just take a picture of the rotor position and put it back the same way. Realize that the rotor will rotate a little when you pull it out and put it back in. this is because of the gear at the bottom that has curved teeth that meshes with the camshaft.