I remember my first "victory" with a dog. I was about 8 and there was this dog who always scared me. My Dad caught on and told me the only reason the dog barked and chased me was because I was scared. He said "Next time, just turn around and yell at the dog!" Well, the next time, i turned around and managed a yell full of more fear than anger and, lo and behold, the dog backed off! Over the next few weeks, I honed my art to the fine skill of walking menacingly toward the dog saying things like "If I get to you, you're never gonna bark again" etc.
Fast forward to today... If a dog tries to chase me, I either turn around and chase him/her or get off my bike and walk towards them. If they're in front, I try to hit them (all this is assuming they're trying to get me). I've taken my feet off the pedals and kicked one or two (that was fun). Never really use a water bottle because it's always got Gatorade, but I did try it with H2O one time and it was effective.
Bottom line, the dog is only brave because it thinks you're scared. If you turn things around, you'll find you have fewer problems.
PS I did have a dog come at me one time on a right angle w/o really barking. I didn't see him until it was almost too late and he ran right into my rear wheel. I had enough time to prepare and keep the bike upright and he feel away somewhat dazed. It wasn't amusing until I was sure he hadn't pooped a spoke!
