Forget about the peep and sight for now. Everyone is talking about different stuff and we don't even know if your bow is set correctly to begin with.

First you need to check the level of your arrow when it is attached to the string and sitting on the rest. The nock of your arrow should be just slightly above level about 1/8th of an inchand the arrow should be crossing directly in front of the rest mounting hole. If it is pointing way below level then you need to either raise your rest or lower your nocking point. This will cause the problems you are having.