1999 Mercury Sable Speed odometer fluctuates, green OD/OFF

When driving my 1999 Mercury Sable LS at highway speeds and sometimes just around town my speed odometer hand will start bouncing from the speed I am going, down to zero and then eventually will drop and stop working. I noticed this on a trip one weekend from VA to WVA on the highway. When this happens there is a slight engine cut back like the transmission is slipping and then I noticed a green light flashing, which I did not know the car even had, just below the RPM guage that says OD/OFF. I have changed the transmission filter recently and was told by someone that the Sables have wheel sensors that tell the transmission how fast the car is going and whether or not to switch to overdrive. I don't know anything about these sensors and hope that is the problem and not that the transmission is going bad. When I was on the road trip when I first noticed this problem, the speedodometer hand eventually went back up to the speed I was going and the OD/OFF light stopped flasing. It seems when this happens and you press the gas pedal to pass on the highway, the transmission will not go into overdrive. Please help.