is there an app on the market place that tells you about upcoming / in progress sales and reductions in the store?
There's no specific app that does this that I'm aware of. If there are any deals to be had Android Central will definitely cover it. If there's an app you are waiting for follow the developers twitter or blog and check it frequently. If there's a price drop they will likely post at one of those two resources.
It works very well. It will show a notification when it finds new sales. When you touch the notification it will show sale items for the past few days. You can ask to see older items and it marks them "expired" when the sale is over. I've used it to purchase several apps including Tapatalk that I'm using now. Seems like a few times a day it will find new items.