You’ll need an examination by a medical doctor to know for sure. Depending on his or her findings, an X-ray may be ordered to rule out elbow dislocation, bone fractures, or bone fragments pulled away from the bone because of a tendon tear. Depending on the results of the radiographs, an MRI may be ordered as well. MRIs can help show if there is any bleeding into the joint and/or the location and extent of any soft tissue damage.
The divet or indentation you mention might be a defect caused by a tendon tear. If the triceps tendon (which attaches to that pointy part of the bone called the olecranon) is pulled away from the bone, a hole or opening is left where the muscle bulk is usually located.
The examining physician can do a clinical test to look for a triceps rupture. It’s modified from a test for ruptures of the Achilles tendon at the back of the foot/heel. A squeezing pressure is applied by the examiner to the triceps muscle. The test is done with the patient lying face down on an examining table. The elbow is bent and the forearm is dangling over the edge of the table.
When the triceps is intact or only partially torn, squeezing the muscle belly causes the elbow to extend (just as if the muscle contracted on its own). No movement of the elbow with this test is a sign that the tendon is fully ruptured. There may be weakness with elbow extension against resistance. You may not be able to extend (straighten) the elbow at all or only through part of the normal range-of-motion.
It’s best to have something like this looked at right away. Early treatment for injuries of this type have the best results. Waiting too long can create changes in the tissues with local scarring and fill-in with fibrotic tissue that isn’t strong enough to stabilize the joint or prevent rerupture.