How do I solve the wheel puzzle?

The combo should be correct.

The turning of the wheel does not matter. Just make sure you stop the wheel on each direction in order, then start the next spin.

BlueKami has the correct answer. While the wheel is spinning hit Stop in the last section before it gets to the direction you need, so it stops there, then spin it to the next direction. For example, at the start when spinning it towards South, you need to hit Stop when it's between either Southwest and South, or Southeast and South, depending on which way you were turning the wheel - Stop always stops it at the next of the 8 directions.