The Xapagy architecture is a story-oriented cognitive system which relies exclusively on the autobiographical memory implemented as a raw collection of events. Reasoning is performed by shadowing current events with events from the autobiography. The shadows are then extrapolated into headless shadows (HLSs). In a story following mood, HLSs can be used to track the level of surprise of the agent, to infer hidden actions or relations between the participants, and to summarize ongoing events. In recall mood, the HLSs can be used to create new stories ranging from exact recall to free-form confabulation.