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I think be on the way up is the correct usage, but in the following sentence

He wrote: “Proud to be here but this wouldn’t be my list. So many films which are my favourites can’t be below my film.. and The Dark Knight deserves to be way up. The number 1 film in the list I totally agree with. That’s my absolute favourite of the 21st century.

Is this used correctly?

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It is just "way up". In American informal speech and writing, "way" means "very much, by far, very, etc" - I had a meal that was way expensive; you are talking way too much; that item is way up (or down) the list.

Definition of way (Entry 3 of 3) 1 informal

a: by a long distance : to a considerable degree or extent : FAR
is way ahead of the class
sat way in the back row

b: by far : MUCH
ate way too much
that's way too expensive

c: VERY sense 1
way cool
way excited

2: all the way
pull the switch way back

from way back
of long standing
friends from way back

Way (Merriam-Webster)

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