Mastertemp 400 and diverter valve position

Contentt

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May 18, 2018
44
Vienna, VA
Trying to understand if the red valve in the picture, I believe it's my diverter valve for the heater, is in the best position. I don't recall ever touching it since the heater was installed a few years ago, but trying to understand flow and how it should be positioned. Thanks for any input.
 

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Here's another pic from the side. Another data point, I find the heater turns on and off quite a lot as it's running. So it goes on for a minute and then stops, and then after a few minutes does it again.
 

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