To add just a bit to what I posted earlier...
There are a lot of decisions throughout the movie that evidence that this is intended to be much more of an expressive film than it is a realistic and logically water-tight film. Michael surviving being stabbed and shot point blanc multiple times and falling out of a second story window is the most obvious supernatural element, but throughout there's no end of highly stylized, unrealistic directorial moves designed to give it a quality of being like a bad dream.
Right away the opening scene sets up the rules that the whole thing is playing by, including this sudden jump to night: We're in first person view in that initial continuous shot, crossing the street and so on, but the Panaglide is giving things a ghostly floating quality, rather than a realistic uneven first person gait. It's an intentional move to suggest supernaturalism. Once he's inside, his sister's boyfriend comes down the stairs and would see him standing there holding the knife, but doesn't. Then the next major decision to look at is that, if you focus on the path that Michael takes through the house on the way up to his sister's room, on the way back down, there is actually a trickily blended jump cut that gets us right to the stairs, skipping half the travel time through the house.
Then where little Michael is standing on the sidewalk holding the knife and his parents pull up and are just looking at him, everything is frozen in a stage-play sort of way as the camera cranes up over the scene. Everything about this sequence is very artificial, with little sneaky moves throughout that are likely to be consciously missed, but are building up a subconscious sense of something being off, a little bit dreamlike and wrong.
(cont'd...)
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