The Babadook

Horror movies are more directly metaphorical than perhaps any other genre. They express through overt symbols or tales the fears, traumas, repressions, and terrible fantasies that lie within us. Those of us who love horror movies, who love sitting in the dark enjoying these little sufferings, know that to abandon yourself to an invented fear is deliciously cathartic.
Embrace what you fear is the unspoken mantra of scary movies and it is smartly and sensitively demonstrated by this lovely, scary Australian film from Jennifer Kent; a powerful illustration of the horrors of repressed grief.
It is anchored by a spectacular performance from Essie Davis as Amelia, a young widow who lives alone with her son Samuel (the angelic Noah Wiseman). Samuel is a bit of a weirdo, a quirky child who always speaks his mind and has a robust imagination. He is scared of monsters and has fashioned ways of protecting himself and his mom from them. 
One night, Amelia finds an odd nighttime story to read him called The Babadook (reminiscent of Edward Gorey on steroids), and she reads it to Samuel in bed.
Soon enough things start going bump in the night. Samuel has been obsessing with monsters all along and Amelia is at the end of her tether with him. Now she starts imagining things too.
Kent keeps the ambiguity alive as things get scarier and weirder. Is there a real presence in the house? Is Samuel a bad seed, or is sweet Amelia losing her mind? The psychology of the characters is very sound. They have been through a terrible ordeal of loss. The child is acting out on some very primal fears and guilt, and so is his mom. Her hubris is to pretend that after what she has been through everything is all right.
Kent is great at creating a sense of dread in the audience but also at highlighting the power of metaphor in almost every scene. The movie unleashes a catalog of commonplace horror tropes. Beds shake and invisible powers drag people by the feet, but there is more convincing poetry (and terror) in the source of the fear that is gripping them both.
Good acting is not usual in horror films, but Essie Davis' gives one of the best performances in the genre. She changes mercurially, from a shy, lonely nurse at a nursing home, to the victim of a violent nervous breakdown. The movie would not be as chilling if her story and her veracity were not as grounded in psychological reality.