I had to change the batteries for mine right out of the box. Sorted out a glitch similar to yours.

Mine is mounted high, with the magnet running very close (something like 1mm, as near as possible to not actually contact the sensor with the magnet).

EDIT: It also depends where you mount the main unit, too. It seems VERY sensitive. If I mount mine on the bars on the SAME side as the sensor, everything is tickety-boo. When I had the main unit on the OPPOSITE side of the bars, it was very hit and miss. I guess thats why they were selling them cheap. I used mine in a 2 hour wet ride without problem, so its not the water.

Hope this helps.

Jim