The valve handle is shaped like a wedge with a handle. The opposite side of the handle is marked OFF. Do not position the valve where this is on the port that goes to the suction of the pump. I believe this is what you describe above to produce steam in the pump basket.

It's safe to run the pump in this condition. It will not do any harm other than recirculate some of the dirt and debris back to the pool.

...and you're welcome for the help.