Monitor the output of the oxygen sensor with a high impedance voltmeter and when the output starts switching between approx. .2 volts and .8 volts you are in closed loop mode.

I know that you changed the o2 sensor but I can't remember exactly what replacement you used. I know that the Volvo 850 that I had was very picky about the sensor. I tried a Bosch universal with no luck and finally installed the Bosch with the OEM connector and all of my problems went away. Also, keep in mind that it is easy to contaminate the sensors with silicone. I have stopped using any RTV that is not sensor safe and no longer use silicone spray to clean up plastic and rubber in the engine bay. I also remember reading that you should not use any type of dielectric grease on the o2 sensor connection.
Good luck.