Good one. I think the two words of "water level" make a term, therefore the lack of apostrophe. " - The water level of the pool is quite low today.
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AnonymousI still cannot generalize to other two words terms.I had a thread the other day in which the poster wanted to put everything in the possessive, but using "The X of the Y." (The key of the house. The house's key) In this case, we'd say, "the house key." I guess this is similar to "water level."