I have often wondered where this idea came from, and when it started.
As a historian of religion I have not been able to find any evidence in any religious tradition for the idea that the dead "looking down on us" exists in any religion practised today, or in the past.
I know that my maternal great-grandfather, a Lutheran pastor, had consoled his eldest daughter, my grandmother, who was five when her beloved mother died by saying she could look down on her dear daughters, but I honestly thought, and so, I believe as an adult did my grandmother, that he had made it up to console a grief-stricken child.
As a teenager, I heard a mother tell a small child that the family dog, which had recently died was now a star in the sky that they could look at after dark. At the time, I thought, how sweet, but that the child would be bitterly disappointed one day when someone said "What nonsense!" I hope no-one ever did.
I do hope my dear mother, who died in 2002 has not been able to see EVERYTHING DH and I did in and out of bed since the day she died!