Mike, you're kind of doing things backwards. Set your peep first. Close your eyes, draw the bow, relax, open your eyes and check your peep. Move your peep up or down until it comes back perfectly every time. Now move on to your sight. If your hitting low "lower" your sight- you will have to raise your bow arm because you lowered your sight and you will consequently shoot higher. Just the opposite if your shooting too high- raise your sight. First the peep - then the sight.
Dan