Sequelize for Node.js: cannot authenticate for postgresql

I am having issues with setting up the sequelize module for node.js.

First I set up a username and password in postgresql:

postgres=# CREATE USER testuser WITH PASSWORD 'test';

Here is my initialize code:

var Sequelize = require('sequelize');
var sequelize = new Sequelize('testdb', 'testuser', 'test', {
    host: 'localhost',
    port: 5342,
    dialect: 'postgres'
});

sequelize.query('select * from mytbl').success(function(tbl){
    console.log('success');
});

However, when i run this short bit of code I get the following error:

events.js:72
        throw er; // Unhandled 'error' event
              ^
Error: Failed to authenticate for PostgresSQL. Please double check your settings.

I am not sure what I am doing wrong? If anyone can help it would be greatly appreciated. Thanks!