I guess this probably originated from, of all places, church. I suppose whenever a sermon got real good and over-zealous, someone might have said "preach on!". (I could be making that up, though.)

I generally say this whenever I think something someone is saying is worthwhile and should be emphasized, continued, or something along those lines. Though I've cut down on my use of it, I say it rarely now, it used to provoke curious glances and the like.

All in all, it's just another way of saying, "hell yeah". (I wonder if that one originated in church..)

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