He's about 4 months, correct?
Not really sure, but just some thoughts...
Do you feed him at regular times? Do you cut off access to water at a specific time?
At 4 months with a little one I'm not sure I'd expect him to be able to go all night long without having to empty his bladder. I'd put it as borderline, some can and some probably can't.
For me I would error on the side of giving him some more time yet. I personally give even my hounds (40 to 50lbs) until they are 6 months with paper in their kennel. And when they are not in it do exactly as you say, watch them at all times. If they seem prone to "accidents" then they even stay on a leash with me. I follow the "schedule" method of letting them out. Then at 6 months I slowly make the paper patch smaller and then go to just crate time, no loose unattended time. By this time I've learned when they need to go out, xx amount of minutes after eating, at yy time and at zz time. So at those times I start giving them a key phrase, we use "go for a run?" and then take them out. By then I've already taught them that "go for a run" command is heard when they wee so it doesn't seem to take to long for them to make the connection.
In LaVie's case, once she was potty trained she would walk into the middle of the room, turn to face you and let out a single bark. A minute later another bark. Never yapp-yapp, just a single bark. But if you didn't answer to her Highnesses bark then there was trouble. She'd walk right in front of you and wee. Kind of like, "Look, I said I had to go. I meant it. I can't hold it." So, she quickly taught me what her signal was. 
With our last puppy, the Pharaoh hound, we hooked a bell on the door and taught her to tap it. Her breeder does that and I thought it was pretty cool. It was quite nifty when we had the good fortune to doggy sit her uncle when her breeder went out of town, he knew what the bell was even in a strange house and would walk right up to it and tap it with his nose. There was no mistake he was asking to go out. This was just done with repeating every time we'd take her out, ring the bell, okay out we go. We started the bell on the door to the back yard. Then moved it to the gate at the top of the stairs. And now even have one on the third floor in the computer room (we live in a townhouse).
Hope this helps...
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tabitha
Kahla and Kayo
And in spirit, Miss LaVie