TORONTO (Reuters) - Americans are knee-deep in an election campaign. Canadians, meanwhile, are testing the waters.

That kind of alignment usually signals a bonanza for North American stocks, especially those listed in Toronto. But this year looks to be different.

As titillating as the US presidential primaries have been, stock markets accustomed to warm and fuzzy fiscal policy just before a vote have been rattled this year by the drumbeat of a possible — some say probable — recession in the United States.

"Almost invariably the lead up to a presidential election is an up year on the market here. But there are exceptions to every rule, and my belief is that this will be the exceptional year," said Douglas Davis, president of Davis-Rea in Toronto.

The usual storyline is to blame: The crash in the US sub-prime mortgage market that shook lenders and dried out global credit markets.

In turn, US job growth and key sectors of the US economy have slowed, tripping up stock markets just as they were reaping the spoils of the long lead-up to an election.

Historically, the Toronto Stock Exchange S&P/TSX composite index logs its biggest gains in the two years prior to a US presidential vote, which, like clockwork, is held every four years.

The running assumption is that incumbent governments, bent on re-election, plough cash into the economy in the hope that spending and tax cuts will win voters' hearts.

Because Canada is so reliant on the United States, its main trading partner by far, a windfall in US fiscal policy is good for Canadian stocks.

A US election yanks around the Canadian benchmark even more than it does the Dow Jones Industrial average.

Between 1950 and 2006, the main Toronto stock index has realised more than 97 percent of its overall gains in the 26 months, or roughly two years, before a US presidential election, according to research by Matt Blackman, a technical market analyst and host of TradeSystemGuru.com.