how to automatically fill in an entity reference field using rules in Drupal 7?
All is well. It works. (finally) I had to recreate my sandbox site and it worked. I installed only the necessary modules.
So beneath the steps in my rule.


After saving new content of type 'story'
Create a new entity
Parameter: Entity type: Node, Content type: article, Title: article related to nid..., Author: 2
Provides variables: Created article (article_created)
Save entity
Parameter: Entity: [article-created], Force saving immediately: true
Set a data value
Parameter: Data: [node:field-myref], Value: [article-created]


(if I didn't have the action 'save entity' it would override the node that was originally used as the default setting in the reference field on the management of the story content type, just so you'd know)

So what was the problem? 
I'm not sure, it was probably a conflict with a certain module. I was thinking of the 'clone module'.