Is the Halladay market shrinking or expanding?

With the Yankees reportedly on the verge of getting veteran Andy Pettitte signed for one year at $11.75 million, they could just pack it in for the winter and head to spring training with a rotation of CC Sabathia, A.J. Burnett, Pettitte and some combination of Joba Chamberlain/Phil Hughes/Chad Gaudin. That group, after all, was good enough to win them a World Series some five weeks ago.

But despite the Pettitte signing, and despite their trading away top outfield prospect Austin Jackson to help acquire Curtis Granderson, there remains a feeling the Yankees are not out of the running for Toronto Blue Jays ace Roy Halladay, the big prize of this off-season. In fact, Joel Sherman of the New York Post writes the Yankees are "engaged" in the Halladay situation. The key to a potential deal could be Jesus Montero, the Yankees' top catching prospect, as well as either Hughes or Chamberlain. It would be just like Brian Cashman to stay completely out of the Halladay fray, at least publicly, then swoop in at the endgame.

The Red Sox, meantime, have ample incentive both to keep Halladay away from the Yankees, and to make a major answer to the Yankees' Granderson acquisition.

But there are many insiders who believe the Philadelphia Phillies are in the best position to acquire Halladay, despite their low public profile in that regard, because they have the players, the money and the location (Halladay prefers a contending team that trains near his Tampa-area home). Some rival executives are interpreting their attempts to trade arbitration-eligible Joe Blanton as a means of freeing up payroll space for Halladay. One such executive, who has spoken to the Phillies, said the team believes it may be able to acquire Halladay without giving up top pitching prospect Kyle Drabek -- by building a package around lefty J.A. Happ and top outfield prospect Michael Taylor. On Wednesday morning, the Phillies' braintrust was holed up in meetings.

The intrigue is building.