Volvo Repair: speedometer, speed signal, speedometer

Question
I have a 740gl sedan, auto, 4cyl, non-turbo 180k
The speedometer start flutating which is going up and down, not steady. Now the needle does not move at all. Please advice what could be the problem and how to troubleshoot.
Thanks in advance.

Phil  

Answer
it could be a bad speedometer or a bad speed sensor in the rear axle.there is a  volvo special tool designed to simulate the speed signal and check the function of the speedometer and the same tool is used to check the signal from the rear axle sensor.my 92 740 does this and it is the speedometer but I have seen both go bad