A couple weeks of shadowing you may help in the sense that if he is looking at you before doing the deed then he knows. So having to suffer the effects of shadowing because he can't be trusted might encourage him to change things around. Do one week of total shadowing for M-W then give him a chance to have a bit more freedom Th and either he comes back to shadow or he earns more away time. Always have shadowing on Monday since he will have lost the effect over the weekend and then let him have chances. But once he has lost the chance it is lost for the entire day. One strike and out that is it. Tough love sort of approach. Sitting on the kitchen floor alone while you make lunch - no talking/interacting with him gets boring.

After that then terminating isn't out of the question as in why should the others suffer any longer but giving it a chance to be turned around at daycare - don't worry about what happens at home as all you care about is how child acts with you. He learns the new rules or he doesn't stay. The makings of a bully for sure. Amazingly the more they go back in the lives of teen/adult bullies the signs were there as toddlers/preschoolers and got ignored. What you are teaching the child is self-control and self-restraint as well as empathy for the feelings and needs of others.

Sometimes a child like this needs to be in a daycare centre where there are more adults and someone can take him out when needed and they have access to professional consultants that can work with the whole family.