My Varistream won't run much above the 12 o'clock position either.
It all depends on the diameter of your hose, and the number of coils on your reel.
The more resistance there is to the flow, the more the back pressure builds up.
It's this back pressure that causes the problem. The Varistream cannot distinguish between back pressure, and you shutting off the water supply.
pressure builds up, Varistream stops the pump. pressure drops, and it starts the pump again. Don't over do the inside dial adjustment. With the pump pressure switch disabled, the Varistream with the inside dial set to maximum, will allow the pump to go up to 130 PSI. Dai