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Cole is becoming more in touch with his own feelings. The Spirit Bear becomes a reflection of Cole's increasing self-awareness. The Spirit Bear is Cole's spiritual reflection that is becoming clearer.
This shows that he can control his feelings and can become "invisible"
Touching Spirit Bear and my brain
Cole, we know, was full of rage because he thought he was worthless. He tries to let this anger go. He then learned that he can never let go, he learns to control it. this is a big change from a boy who slammed a boys head on a sidewalk.