Coach Gene Shue kept looking down his bench last night at Capital Centre as the Washington Bullets lost an exhibition game to the Houston Rockets, 90-84. The more he looked at his players sitting in street clothes, the more frustrated he became.

"What we really wanted to do was look at players and win the game. It would have been a big confidence builder," Shue said. "I know our team. We're missing Gus (Williams), Cliff (Robinson) and Jeff Malone. And Greg Ballard, too. He wasn't there either."

Ralph Sampson was for the Rockets, however. Although he scored only 12 points, many in the crowd of 14,463 will remember his two exceptional blocks that turned around the game in the fourth quarter.

In the first game of the doubleheader, Bernard King scored 36 points as the New York Knicks broke a four-game losing streak in the preseason with a 113-103 victory over the Atlanta Hawks.

Rodney McCray led the Rockets (3-3 in the preseason) with 20 points, but 7-foot rookie Akeem Olajuwon missed 11 of 14 shots and scored only seven points in 30 minutes. For the Bullets (1-3), Jeff Ruland had 20 points and Frank Johnson 17.

The Bullets did get some good news. They announced that forward Robinson, who has been out with a sore right shoulder and back spasms, will begin conditioning drills and is expected to begin practice Wednesday.

Guards Williams and Malone, both of whom have ankle injuries, will be examined Monday by team physicians and also should be ready to practice Wednesday, two days before the season opener against Chicago.

Thus, they will miss the last two preseason games, against the Rockets tonight in Norfolk and against the New Jersey Nets Monday night in Miami.

Larry Fleisher, Ballard's attorney and the executive director of the NBA Players Association, held his annual training-camp meeting with the Bullets yesterday. His presence here also allowed him to meet face-to-face with team owner Abe Pollin over the status of free agent Ballard, the team's starting small forward the past five seasons.

Team sources say the two sides are continuing to move closer to an acceptable contract for both. "We're still talking" was all Pollin would say.

The team did announce two unsurprising personnel moves following the game. Center Tom Piotrowski and guard Delonte Taylor, a free agent from Wilson High School in the District, were placed on waivers, reducing the roster to 13, one over the regular-season limit. That total does not include Ballard.

The Bullets could have used Ballard last night. The Rockets' small forward, McCray, also had 12 rebounds in addition to his team-high scoring total. Shue split playing time at that position among Darren Daye, Guy Williams and Charles Davis.

The Bullets played good team defense on Sampson, who is 7-4, and Olajuwon. In fact, with rookies Guy Williams and Tom Sewell playing impressively, the Bullets had a 42-37 halftime lead. In the third quarter, Sampson blocked two attempted dunks by Rick Mahorn, turning the momentum of the game.

On the second, the Bullets had a four-on-one fast break with Mahorn driving the base line for a dunk. Just as he reached the rim, Sampson, coming from the other side, swatted the ball away.

"People don't realize Ralph is going to revolutionize basketball," Houston point guard John Lucas, a former Bullet, said before the game. "Power forwards will have to be 7 feet tall. He's just a couple of years ahead of his time."

His time has come defensively. He had five blocked shot last night and Olajuwon had four. But it still is in the future offensively. Sampson made only six of 18 shots.

A half-hour after the game, Mahorn walked back into the locker room from the training room and sighed. "Try to keep jumping over two 7-footers all night. I wish I was really 6-10 (as he is listed on the roster)."

With Sampson providing defense, veterans Robert Reid and Phil Ford proved an especially effective back court pairing in the second half, accounting for 19 points, five rebounds, four steals and three assists.

By the end, the Bullets were in a running game and were making some bad decisions. It was still 88-84 with just under a minute to play when first Johnson, then Dudley Bradley attempted desperation shots from three-point range.

It brought Shue off the bench, motioning to his guards in a "What's going on here?" gesture. When Reid made a 15-foot jump shot on Houston's next possession, the Bullets' hopes of winning evaporated.

"Last year we often made bad decisions," Shue said. "It wasn't uncommon. That's why we tried to play a half-court game last year."

Last night, the players who will make the Bullets a good running team were spectators. "It's really holding us back as far as the team is concerned," Daye said.

"You don't know what your true value is," said Tom McMillen, a 10-year veteran. "You've some some inponderables . . . But it'll all work itself out real soon."