The simplest way is to place the paster object where you want the water to be, then make an event like this:
every tick
--- paster: clear to rgba(0,0,0,0)
--- paster: set height to -self.height
--- paster: paste smileSprite
--- paster: set height to -self.height
and that's it. If you have multiple objects you want to reflect put more paste actions in there.
A slightly more deluxe method that reflects an entire layer would be this: