You are doing it right... the car is doing it wrong.
Now that you have confirmed that there is no spark at the plugs, you move back and repeat the test at the hi-voltage wire coming from the coil. Just lay it so its end is 1/4 to 3/8 inch from engine or body and have somebody crank the engine while you look for spark.
If it's there, the trouble is isolated to the distributor cap & rotor. If it's missing, first check to see whether the distirbutor is even turning (I'm hinting at a broken timing belt). If the dizzy turns, you have a bad pickup unit or ignition module or similar primary ignition failure.
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