My 95 850 turbo has been acting up. The speedometer works periodically and the yellow low gear arrow flashes

 

You got a transmission problem. Get the codes read.
http://www.matthewsvolvosite.com/read-codes-volvo-850

 

could be the ABS module, or the speed sensor. The flashing arrow is saying there are codes to be read. Try tapping into the A1 port on the diagnostics module, press the button for 1 sec, read codes, report back :-)

 

Ours was and still does that if it sits for a few days and the battery gets a little low. The yellow arrow is flashing because the transmission is not getting the speed sensor signal from the speedometer, which is electronic and is not working correctly due to low voltage.

On ours, the speedo will not work for about the first three miles then will start working. However the yellow arrow will keep flashing until you shut it off for a couple minutes and re-start it, then all is well. (or as well as can be expected for a 21 year old car with 265,000 miles)