Shift Kit

Alright I got all but one of the holes drilled. The last one, which you're supposed to drill through the line bypass ball and spring socket. If you look at the directions (page 4 step 1) it says to drill it under "x" but I'm not quite sure where to drill it still, posted a pic of what I'm saying, I know what side it is but not up and down.

Is it drilled in the area where the red arrow is, the round, barrel looking thing, or where the black arrow is pointing in that flat area.