Jim Ahern and first-round co-leader Jose Maria Canizares share third at 9-under-par. Graham Marsh is alone in fifth at minus eight.
Nelson was flawless on Saturday with eight birdies and no bogeys. He went into red figures at the 190-yard third hole when he roped a 4-iron three feet from the cup. He added back-to-back birdies late in his first nine when he drained a 15-footer at eight and then followed with a two-putt birdie at the par-5 9th.
A two-time winner already this season, Nelson holed birdie putts from three feet and six feet at the 10th and 12th, respectively. He played a 6-iron to 25 feet at the 211-yard 14th and drilled the putt for birdie. Nelson two-putted from 30 feet at No. 15 after he played to 30 feet with his second shot.
Nelson capped his round off with a birdie at 17 when his 6-iron approach landed four feet from the cup.
'The last nine holes today were as solid as I have played in a long time,' noted Nelson, whose 64 tied the course record at Valencia Country Club. 'Overnight rain made this play easier today.'
Colbert posted his second 5-under 67 in as many days. He saved par at the first and then rolled home a pair of 10-footers for birdie on four and six to go out at 2-under 34.
Colbert suffered just his second bogey of the tournament after he drove into the rough at 10 and could not make the save. He holed a nine-foot birdie at 12 and then converted a 15-foot par putt at 13.
He hit a 5-iron to 25 feet at the 14th green and then ran home the putt for birdie. Colbert grabbed his share of the lead thanks to his approach at 17. He had 180 yards to the stick and he smacked a 5-iron that landed behind the hole and spun into the cup for an eagle-two.
'You don't count on shots like I hit at 17,' said Colbert, who is winless in individual tournaments since 1998. 'I hit it 180 yards and one foot and it spun back in.'
Colbert knows that he will have to beat one of the Senior Tour's best to earn the victory.
'Larry Nelson has played well for a seven or eight-month period now,' said Colbert, referring to one of his final-round partners on Sunday. 'It's much like Tiger. He's totally committed and totally focused on being the best out here.'
Ahern made two eagle putts on Saturday, one from three feet at nine and the other a 30-foot bomb at 15. He finished the day with a 5-under 67. Canizares, the winner of last week's marathon playoff at the Toshiba Senior Classic, bogeyed the last hole to fall out of the lead. He posted a two-under 70 on Saturday.
Marsh made three back nine birdies for a 67.
Gary McCord made the biggest move on Saturday with a 7-under 65. He moved to 8-under and is tied for sixth with Bob Eastwood.
'You try to get into a flow,' said McCord, who is probably better known as a broadcaster for CBS' golf telecasts. 'You have to mesh the mental and physical. For me, thinking well doesn't collide in the same sentence with the physical. It's hard to balance these things, but is there anything better?'
Bob Charles, who shared the overnight lead with Canizares, struggled to a 2-over 74 and is tied for eighth at minus five.
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