Cylinder 1 is TDC, which direction should the rotor in the distributor be facing?

Should be rotating clockwise and the no.1 tower @ 12 o clock looking at it at the drivers side-

Firing order-1342 ( clockwise) rotation

REMOVAL

1. Rotate crankshaft in normal direction of rotation until ignition timing mark (No. 1 piston should be in compression stroke) on crankshaft pulley is in line with indicator pin on timing chain cover.
2. Remove distributor cap and disconnect vacuum tube from distributor.
3. Disconnect primary wiring at distributor. On GLC models, mark rotor position on distributor body, then place alignment marks on distributor body and distributor mounting before removing distributor.
4. Remove distributor lock bolt.
5. Slide distributor out of cylinder head. Do not crank engine after distributor has been removed.

INSTALLATION

1. Align marks on distributor housing and driven gear. On GLC models, align rotor to distributor housing and distributor housing to distributor mounting marks made during removal, when installing distributor.
2. Install distributor and lock bolt. On 323 models, align distributor blade with small oil holes before installing it.
3. Rotate distributor housing until reluctor or signal rotor aligns with pole piece of pickup coil. On all models, tighten distributor hold-down bolt.
4. Install distributor rotor and cap.
5. Install high tension leads and connect primary wiring.
6. Connect vacuum sensing tube to vacuum control unit.
7. Adjust ignition timing.

Make sure you are on the compression stroke, turn the engine by bumping the starter and remove #1 spark plug, when you feel pressure as the timing mark is coming up you are on the compression stroke, the mark will come up twice but only one of them is the compression stroke.

Please check out this page to see what I am talking about.

https://www.2carpros.com/articles/how-a-car-engine-works

Check out the images (below). Let us know if you need anything else.