"Your confidence is based on what you see on the football field," Sir Alex told Sky Sports News. "Obviously the way the team is performing at the moment, and the squad we have got together, gives you that confidence.
"These players have a great team spirit among them. They're hungry players, they never give in as they demonstrated last Saturday at Tottenham. These are fantastic qualities to take into the second half of the season.
The Reds slipped to an unlikely defeat in the first derby of the season, during a stuttering start to the campaign, but Sir Alex has been satisfied with their subsequent recovery.
"The performances this year have been very good," he said. "We got off to a sticky start, missing Rooney and Ronaldo, and players weren't 100 per cent fit, but now it's really going well.
"It's a developing team, as I said a year ago, it's a young team that is growing up together. The squad is looking strong and I hope that will help us."
"It's bearing up well," he said. "My squad is getting stronger. Louis Saha is back next week, Paul Scholes being back is like signing a new player and Ji-sung Park coming back is another big bonus to us.
"It's going to be tight, no question about that. It's a tough league, it's not an easy league, it's not an amateur league, it's a real, tough, professional league."