My daughter had a new little literacy milestone last night. I was reading to her in bed when she rejected the pile of available books. She instead pretended to hand me an invisible book, and said that I could read it by looking at the shadow of the words. I was a bit taken aback, but I started with "Once upon a time," and paused. She then chimed in with her idea for a story (involving two sisters who were serially kidnapped by a witch, and then had to rescue one another).
I would take over when she seemed to run dry, and then she would pick the narrative up again when I next paused. The story bore certain elements of Moldylocks and the Three Beards, as well as the movie Frozen (seemingly ubiquitous in homes with preschoolers these days). Other ideas, well, I'm not sure where they came from. I wish I had the whole thing on video, but I was caught off guard, and didn't have a chance.
I am sure that there will be other opportunities, because my daughter, who turned four in April, was positively giddy with the fun of making up her own stories. I eventually had to steer her back towards the printed books (the non-invisible ones), because she was getting too wound up to be able to sleep. What I loved most about the whole thing was that the storytelling was completely instigated and led by her - I was just going with the flow. Definitely a fun stop on our pathway to literacy.