There is flashing under the shingles and bent up the wall. You're seeing the counter-flashing which covers it and ties into the brick.

If you enlarge the picture you can see the step flashing under the shingle. 3 years ago I replace my chimney crown and re tuckpointed the grout 5' down. I did it similar to the picture Joe posted, but did it the clean better way.

I don't like step counter flashing and I don't like caulking it like you see in the picture, it just looks messy. I used a continuous piece of counter flashing and made a 75 degree bend 3/4" wide at the top with another 1/4" bend to make a V on the edge. I then snapped a line on the chimney brick and ground a 1/2" slot all the way down at a 75 degree angle sloping down. I inserted the V the slot and tapped it in. Finally I drilled 1/4" holes trough the counter flashing and into the mortar joints every couple feet and slammed in hammer set anchors. I DID NOT use any caulking.

If you decide to do tuckpointing grind out at least 3/4" of the old grout first. and rake your joints out to the original depth. If you're going to replace your old crown do Not use Masonry cement and use Portland cement with wire in it. Overhang the crown from the brick by 1-1/2" and leave an air gap between the crown and clay liner and caulk the gap with high temperature silicone.

I've done Brick and stucco houses the same way as described above with 6' lengths to get a nice clean look and less likely to leak then with the individual step and caulk shown in the picture.

Thankk you both!