It is my understanding that the positive connection which is supposed to have the plastic red cap on it, is supposed to be on top as Vikki is stating. My original alt was like that, then when I switched to an internal regulated alt. my positive connection was at the bottom near the valve cover.

As Jim said, having the positive connection at the bottom near the valve cover can cause some issues. At one time mine was so close I could not install the red cap and sure enough it was so close that the positive wire was arching accross to the valve cover.

I was told that you could rotate the two peices and bring the positive connection up to the top as they are supposed to be. Bascially re-clocking as Amervo talks about above. This solves all the problems. In addition the red cap will install and everything will look as it should...