Turn left at Selhurst. An early signalling stage could make that chord suitable for passenger trains and allow reversing in platfrom 1, but not a good place for a reversal
But how to reverse at Norwood Jn?
Not ideal to block the middle bidirectional road during the reversal.
Terminate at Selhurst, then run empty stock via chord to depot and reverse in siding next to carriage washer road.
Anoher option might be to do a big anti-clockwise loop. Left at Selhurst, via chord (upgraded for passenger), through Platfrom 1 at Norwood Jn, then turn left to Crystal Palace and back to Balham.
Operationally, it might be interesting if some sort of "rounder" service was possible; going on the Up and Selhurst into Platform 1 at Norwood Junction then via Streatham Hill. Would replace the West Croydon service and vice versa. Not thought it through any further mind you!